Mortgage in America

Daily Rate Update: September 13th-17th

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Thursday – September 15, 2021

Home borrowing costs were essentially unchanged this week and remain just above historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage is at 2.86% with 0.7 in points and fees. The record low was 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “It’s Groundhog Day for mortgage rates, as they have remained virtually flat for over two months. The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat”

First-time unemployment claims rose the latest week as the sector continues to get back to full strength. At present, there are 11 million jobs available across the nation. The Bureau of Labor Statistics reports that Weekly Initial Jobless Claims were up 20,000 to 332,000 for the week ended September 11, 2021. To put it into perspective, the week of April 4, 2020 claims were over 6 million as the shutdowns took hold. Continuing claims, or those receiving benefits for at least two weeks straight, fell to a post-shutdown low of 2.665 million from 2.852 million. Many unemployed Americans should be able to go back to work as the enhanced unemployment benefits have expired in most states.

Strong economic data hit the wires this morning which is weighing on bond prices. Retail Sales for August jumped 0.7% versus the loss of 0.7% expected while x-autos surged 1.8%, well above the decline of 0.2% estimated. Sales were up 15.1% from a year ago. The September Philly Fed jumped to 30.7 from 19.4 in August and follows yesterday’s strong showing from the Empire Index.

Courtesy of Mortgage Market Guide 

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Wednesday – September 14, 2021

Home borrowing costs were unchanged in the latest week and remain just above record lows. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage held steady at 3.03% with 0.32 in points for the week ending September 10, 2021. Within the report it showed that the Market Composite Index rose 0.3%, the Refinance Index declined 3.0% while the Purchase Index jumped 8%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “The very competitive purchase market continues to put upward pressure on sales prices.”

Oil prices are on the rise which could be a sign of the economy picking up as demand increases. WTI oil is near $73/bbl, up from $61 in early August. Some other effects of high oil prices – it’s a tax that weighs on consumer spending and consumer spending makes up two-thirds of our GDP. Higher oil is also inflationary as oil is an ingredient in many products – this adds to wholesale/producer prices. The rise in oil prices hasn’t hit motorists at the pump yet with the national average price for a regular gallon of gasoline at $3.18, unchanged from a month ago.

Courtesy of Mortgage Market Guide 

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Tuesday – September 13, 2021

The August Consumer Price Index (CPI) fell to a gain of 0.3% in August from 0.5% in July and was the 2nd straight monthly and annual decline supporting Fed Chair Powell’s words that inflation pressures could be transitory. The annual headline rate fell to 5.3% from 5.4% while the Core CPI fell to 0.1% from 0.3% monthly and from 4.3% to 4% year over year. The price of used cars saw its largest monthly decline in 5 years of 1.5%.

Labor shortages continue to plague small business owners across the nation. The NFIB Small Business Optimism Index increased in August to 100.1, up 0.4 points from July. “As the economy moves into the fourth quarter, small business owners are losing confidence in the strength of future business conditions,” said NFIB Chief Economist Bill Dunkelberg. “The biggest problems facing small employers right now is finding enough labor to meet their demand and for many, managing supply chain disruptions.” Small businesses are the backbone of the U.S. economy.

Buying a home became a bit easier in August as the number of offers have fallen from 25-30 to the current rate of 5-7. Redfin reports 59% of home offers written by Redfin agents faced bidding wars in August, the lowest level since 2020. “Sellers are still pricing their homes very high, but a lot of buyers have had enough and are no longer willing to pay the huge premiums they were six months ago,”said Nicole Dege, a Redfin real estate agent in Orlando, Florida.

Courtesy of Mortgage Market Guide 

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