Daily Rate Update: August 3rd-7th

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Thursday – August 6, 2020

Americans filing for first-time unemployment benefits fell to their lowest level, albeit still at lofty levels, since the explosion in March. The Labor Department reports that Weekly Initial Jobless Claims rose by 1.1 million in the week ended August 1, versus the 1.4 million expected. It was the lowest level since the 6.87 million reported for the week ended March 28, 2020. Continuing claims declined by 844,000 to 16.1 million. The report comes ahead of tomorrow’s Jobs Report for July.

Mortgage rates continued to hit fresh record lows in the latest survey giving potential buyers more purchasing power and strengthening demand. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 2.88% this week with 0.8 in points and fees. A year ago, the rate was 3.60%. However, Freddie Mac says that the main barrier to rising housing demand remains the lack of inventory, especially for entry-level homes.

Courtesy of Mortgage Market Guide 

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Wednesday – August 5, 2020

Mortgage application activity declined in the latest survey despite rates falling to fresh record lows, reports the Mortgage Bankers Association (MBA). The MBA reports that the 30-year fixed-rate mortgage fell to 3.16% with 0.39 in points for the week ended July 31, 2020, the lowest on record. The Market Composite Index, a measure of total mortgage loan application volume, fell by 5.1%, the Refinance Index fell 7% while the Purchase Index declined 2%. “MBA’s forecast calls for rates to remain at these low levels, which will continue to spur strong refinance activity and offer homeowners relief in the form of lower monthly mortgage payments during these uncertain economic times,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.

Private employment growth came in well below expectations in July from June but June’s numbers were revised higher by 2 million. ADP Private Payrolls rose by just 167,000 in July, well below the 1.6 million expected. However, June’s numbers were revised to 4.31 million from 2.36 million. Small businesses added 63,000, medium-size businesses lost 23,000 while large businesses gained 129,000. “The labor market recovery slowed in the month of July,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We have seen the slowdown impact businesses across all sizes and
sectors.”

Courtesy of Mortgage Market Guide 

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Tuesday – August 4, 2020

CoreLogic reports that home prices, including distressed sales, rose 4.9% year-over-year in June, up from the annual gain of 4.1% in May. Month over month, prices rose 1% from May 2020 to June 2020. Looking ahead, prices are expected to decline by 1%. Dr. Frank Nothaft of CoreLogic said, “Mortgage rates hit record lows this spring, which enhanced affordability for home buyers. First-time buyers, and millennials in particular, have jumped at the opportunity to achieve homeownership.”

Stocks are near unchanged as investors await any stimulus news from D.C. The S&P 500 (3,294) hovers just below its all-time high (3,386) hit back on February 19, 2020, just before the pandemic induced shutdown occurred. Fed intervention, stimulus and a rebound in the economy have helped to push stocks higher since the March lows.

Congress is still locked in talks over what is in and what will not be in the new Phase 4 stimulus package. Whether or not to extend the enhanced $600 federal unemployment benefit is the big issue that has stalled the talks. Both sides know that there has to be a swift agreement to help those Americans truly in need of aid. There should be a deal struck soon.

Courtesy of Mortgage Market Guide 

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Monday – August 3, 2020

Positive earnings coupled with hopes of a big stimulus package from Congress is lifting stocks this morning at the expense of the bonds. After the strong earnings from the tech giants late last week and several more positive numbers this morning, stocks are pointing higher while investors keep an eye on D.C. for headlines of progress for the Phase 4 Coronavirus stimulus package. Of the 300 S&P 500 companies that have reported earnings this season, 85% have exceeded expectations. U.S. stocks are higher to begin the week.

Lawmakers are trying to quickly hammer out a new stimulus package. The enhanced $600 unemployment benefit expired Friday night and leaves millions of Americans to receive their state benefits only. Lawmakers are back in session today. Congress has agreed that Americans should receive a direct payment of $1,200 but are far apart on many other compnonebts within the bill.

The week features two key labor market reports with ADP on Wednesday and the government’s Jobs Report on Friday. Earnings reports will also continue during the week. The only other key reports this week is this morning’s ISM Manufacturing Index, the ISM Service Index and Weekly Initial Jobless Claims report on Thursday.

Courtesy of Mortgage Market Guide 

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