Thursday – September 15, 2022
Freddie Mac reports that home borrowing costs rose for the fourth straight week due in part to fears of aggressive rate hikes and sustained high inflation. The 30-year fixed rate mortgage rose to 6.02% this week from 5.89% last week with 0.8 in points and fees. A year ago the rate was 2.86%. The 30-year is above 6% for the first time since late 2008. The 15-year rose to 5.21% from 5.16% with 0.9 in points and fees. A year ago the rate was 2.21%. Sam Khater, Freddie Mac’s Chief Economist said, “Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate. This indicates that while home price declines will likely continue, they should not be large.”
In economic news, August Retail Sales were up 0.3% versus 0.2% expected and up from -0.4% in July, x-autos -0.3% vs 0.1% expected and down from 0.4%. Weekly Claims fell to 213,000 versus 226,000 expected. The September Philly Fed fell 9.9 versus a gain of 2.8 expected and down from 6.2 in August. The September New York State Empire Index came in -1.50 versus -13 expected and up from the dismal -31.30 in August.
Gas prices continued to decline this week after hitting record highs back in June. Motor club AAA reports that the national average price for a regular gallon of gasoline is at $3.69 down from $3.75 a week ago, from $3.95 a month, from $5 in June and up from $3.18 a year ago. AAA said although gasoline demand has decreased, fluctuating oil prices have led to smaller pump price decreases. If oil prices continue to rise, the national average will likely reverse as pump prices increase.
Courtesy of Mortgage Market Guide
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Wednesday – September 14, 2022
After yesterday’s hot CPI report that led to a crash in the stock markets, a fall in Mortgage Bond prices and a rise in yields, this morning’s lower year-over-year headline and core wholesale inflation data, PPI, have provided a bounce in bond prices. August PPI fell 0.1%, inline and up from -0.4% in July, year over year 8.7% versus 8.8% and down from 9.8% in July. Core 0.4% versus 0.3% expected and from 0.3% in July, year over year 7.3% versus 7.1% down from 7.7% in July. So a bit cooler than expectations which calmed some of the fears.
Home borrowing costs increased in the MBA’s latest survey hitting levels not seen since 2008. The 30-year fixed-rate mortgage rose to 6.01% from 5.94% with 0.76 points for the week ended September 9, 2022. Within the data, it showed that the Market Composite Index fell 1.2%, the Refinance Index lost 4% and the Purchase Index was essentially unchanged. Spokesperson Joel Kan said, “The 30-year fixed mortgage rate hit the 56% mark for the first time since 2008 – rising to 6.01% – which is essentially double what it was a year ago.”
Courtesy of Mortgage Market Guide
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Tuesday – September 13, 2022
Consumer prices remained near multi-decade highs which is putting a heavy burden on U.S. households. The August Consumer Price Index (CPI) rose 0.1% from unchanged in July and above the -0.1% expected. The year-over-year number was up 8.3% versus 8.1% expected though down from 8.5% in July. The more closely watched Core CPI, which strips out food and energy, jumped 0.6% versus 0.3% expected and double what was reported in July. Year over year, Core CPI rose 6.3% versus 6.1% expected and above 5.9% in July.
Digging further into the CPI numbers found that the food index increased 11.4% over the last year, the largest 12-month increase since the period ending May 1979. The energy index rose 23.8% over the past 12 months. The index for electricity rose 15.8%, the largest 12-month increase since the period ending August 1981. The CPI measures the change in prices paid by consumers for goods and services.
Mortgage credit availability declined in August according to the MBA. A decline indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The Mortgage Credit Availability Index (MCAI) fell 0.5% to 108.3 in August. The index was benchmarked to 100 in March 2012. “Mortgage credit availability declined slightly in August, as investors reduced their offerings of ARM and non-QM loan programs,” said spokesperson Joel Kan.
Courtesy of Mortgage Market Guide
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