Friday – October 1, 2021
Inflation pressures held steady in August after the recent surge in prices while consumer spending rose. The Federal Reserve’s favorite inflation measure, the Core PCE, was unchanged monthly and annually up 0.3% and 3.6%, respectively. Within the numbers it showed that Personal Spending rose 0.8% as consumers spent on food and household goods along with recreational goods. Consumer spending makes up two-thirds of economic activity and is included in the Gross Domestic Product.
Two key economic reports came in better than expected ahead of next week’s granddaddy of all report, the government’s Jobs Report. The final read on Consumer Sentiment for September came in at 72.8 from 71.0 in August. The September ISM National Manufacturing report showed the index rose 61.1 from 59.9 in August. The employment component of the index also registered a gain. A spokesperson from the ISM said, “Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand.”
Courtesy of Mortgage Market Guide
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Thursday – September 30, 2021
Home borrowing costs jumped this week and remain just above historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 3.01% from 2.88% last week 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, “Many factors led to this increase, including the Federal Reserve communicating that it will taper its support of the capital markets, the broadening of inflation and emerging energy supply shortages which compound other labor and materials shortages.”
First-time unemployment claims rose in 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 Labor Department reports that Weekly Initial Jobless Claims were up 11,000 to 362,000 for the week ended September 25, 2021. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 2.802 million from 2.820 million. Many unemployed Americans should be able to go back to work as the enhanced unemployment benefits have expired in most states.
Courtesy of Mortgage Market Guide
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Wednesday – September 29, 2021
Home borrowing costs increased in the latest week and remain just above record lows. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage rose seven basis points to 3.10% from at 3.03% with 0.34 in points for the week ending September 24, 2021. Within the report it showed that the Market Composite Index fell 1.1%, the Refinance Index jumped and the Purchase Index both saw a 1% loss. A spokesperson said, “Increased optimism about the strength of the economy pushed Treasury yields higher following last week’s FOMC meeting. Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed-rate reaching its highest level since early July 2021.”
A slow rise in inventories along with moderating prices is lifting some of the clouds from the housing market as the weather turns to fall. The NAR reports that Pending Home Sales surged 8.1% in August from July and well above the 1% expected. A sale is listed as pending when the contract has been signed but the transaction has not closed. “Rising inventory and moderating price conditions are bringing buyers back to the market,” said Lawrence Yun, NAR’s chief economist. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”
After the big increase seen at the pumps, gas prices have leveled off and have only inched higher in the past month. The national average price for a regular gallon of gasoline is $3.18, down a penny from a week ago, up from $3.14 a month ago and up from $2.18 a year ago. Historically, prices tend to move lower this time of year as motorists tend to do less driving but the recent rise in oil prices has kept prices elevated. “Consumers should see the usual autumn relief at the pump,” said Andrew Gross, AAA spokesperson. “But factor in that approximately 16% of crude production in the Gulf of Mexico is still shut down because of Hurricanes Ida and Nicholas and the concerns about what higher COVID cases could do to the economy, and this uncertainty is helping to keep oil prices elevated.”
Courtesy of Mortgage Market Guide
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Tuesday – September 28, 2021
Strong demand and low inventories continue to push home prices higher across the nation with records seen in July. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, saw a record 19.7% year-over-year gain in July, up from 18.7% in the previous month. The 20-City Index rose 19.9% annually, up from 19.1% in the previous month. Monthly, from June to July, the National Index saw a 1.6% gain, while the 20-City Index rose 1.5%.
The number of homeowners in forbearance continues to decline and are now at pre-shutdown levels. The share of loans in forbearance fell 4bp to 2.96% with an estimated 1.5 million homeowners still in the program. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3bp to 1.44% while Ginnie Mae loans rose 3bp to 3.42%. “The share of loans in forbearance continued to decrease last week, dropping below 3 percent for the first time since March 2020,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
The Consumer Confidence Index fell to 109.3 this month from 113.8 in August and below the 114.4 expected. Within the numbers it showed that 19.3% of consumers said business conditions are “good,” down from 20.2% while 25.4% of consumers said business conditions are “bad,” up from 24.1%. Also, 55.9% of consumers said jobs are “plentiful,” up from 55.6% but 13.4% of consumers said jobs are “hard to get,” up from 11.2%. Lynn Franco, Senior Director of Economic Indicators at The Conference Board said, “Concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again.”
Courtesy of Mortgage Market Guide
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