Daily Rate Update: August 19th-23rd

posted in: Uncategorized | 0

Friday – August 23, 2019

Sales of newly-constructed single-family homes fell in July from June, though the numbers in June were revised sharply higher. Low mortgage rates have been a support mechanism for the housing market while low inventories and a construction slowdown have made purchases less affordable for potential buyers. The Census Bureau reports that new home sales in July fell to an annual rate of 635,000 units, below the 645,000 expected. However, June was revised sharply higher to 728,000 from 646,000. Sales were up 4.3% from July 2018.

Fed Chair Powell spoke this morning at the Fed sponsored Jackson Hole Economic Symposium. Mr. Powell says the Fed will act as appropriate on rates, the Fed is in risk management mode, and sees further evidence of slowing global growth while inflation remains low. Mr. Powell also reiterated that the Fed’s challenge now is to sustain the current economic expansion. Mr. Powell went on to say that the US outlook continues to be favorable and job growth and rising wages continues to support consumer spending.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Thursday – August 22, 2019

Americans filing for first-time unemployment benefits remained near 50-year lows in the latest week as the labor market continues to remain a bright light in the US economy. The Bureau of Labor Statistics reports that weekly initial jobless claims fell by 12,000 in the latest week to 209,000. The four-week moving average of initial claims, which irons out seasonal abnormalities, was essentially unchanged at 214,500.

The two-day Jackson Hole Economic Symposium kicks off today and is hosted by the Kansas City Federal Reserve Bank. Participants include prominent central bankers and finance ministers, as well as academic luminaries and leading financial market players from around the world. Fed Chair Powell will be speaking tomorrow morning around 10:00 a.m. ET. This morning, Kansas City Fed’s Esther George said she disagreed with the recent fed funds rate cut.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Wednesday – August 21, 2019

US stocks are rebounding this morning after solid earnings from Lowe’s and Target signaled strong consumer spending. The headlines quelled fears of slowing economic growth here in the US. Better-than-expected retail sales over the past four months also confirms solid consumer spending. The US economy remains the cleanest shirt in the laundry compared to global economies.

Mortgage rates were essentially unchanged in the latest week and remain near three-year lows. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage was 3.90% in the latest week with an average 0.35 in points. The Market Composite Index, a measure of total mortgage loan application volume, fell 1%, the Refinance Index rose a meager 0.4% while the Purchase Index fell by 4%.

The minutes from the July 31 Fed meeting will be released this afternoon at 2:00 p.m. ET and could stir things up a bit in a rather quiet week for trading. The August doldrums have set in as the summer comes to a close with many players away on vacation. The minutes could reveal the path of future interest rate policy.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Tuesday – August 20, 2019

Low mortgage rates will continue to boost mortgage originations in 2019, reports the Mortgage Bankers Association (MBA). The MBA is forecasting that the 30-year fixed-rate mortgage will average 3.70% in Q3 and Q4 of 2019, down from its previous forecast of 3.90%. The low rate environment will also boost total originations by 15% in 2019 compared to last year to $1.86 trillion from $1.64 trill in 2018. The MBA went on to forecast that home prices will increase 4.7% in 2019 from the 6% gain seen in 2018. In conclusion, the MBA sees economic growth (GDP) will decrease to 1.7% in Q4 2019 from a 3.1% in the first three quarters of 2019.

A report out by Capital Economics shows that home prices will increase by 3% in 2019, up from a 2% rise that was forecasted in the beginning of the year. Mortgage rates are hovering near a three-year low and are down from last year’s average of 4.53%. In addition, low housing inventory will also help to boost prices. The report went on to reveal that given the upcoming slowdown that will weigh on job creation and earnings, potential buyers may be less willing to bid aggressively for a home.

US stocks continued their rebound higher yesterday on easing concerns surrounding trade, currency, and yield curve issues. Though with little data today and in the absence of any glaring headlines along with summer trading desks below normal capacity and lower volumes, trading should be on the quiet side. There were reports that the White House is exploring a temporary payroll tax cut to boost consumption but that was later denied by the administration. The markets may begin to heat up tomorrow with the Fed minutes being released and the Jackson Hole Economic Symposium on Thursday.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Monday – August 19, 2019

The National Association of REALTORS reports that housing affordability rose in June from a year ago due in part to three-year low mortgage rates. The Housing Affordability Index rose to 151.9 in June from June 2018, a 10% rise. A higher reading means that homes are getting more affordable that measures prices, incomes, and financing costs. The median price for single-family homes across the US was $288,900 in June, up 4.5% from $276,500 in June 2018. Freddie Mac reported last week that the 30-year mortgage rate was 3.60% compared to 4.53% a year ago.

US stocks begin the week considerably higher as global recession fears ease a bit while President Trump said over the weekend that he doesn’t see a recession here in the US. And after several global central banks announced additional stimulus plans late last week, stocks are surging with Dow futures +300 points. The week is light on economic data. The highlight this week will be the two-day Jackson Hole Economic Symposium hosted by the Fed that begins on Thursday. The Fed minutes from the July 31 meeting will be released Wednesday afternoon and could offer some clues as the future path of interest rates.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp