Daily Rate Update: February 10th-14th

posted in: Uncategorized | 0

Friday – February 14, 2020

A brighter view from consumers on the economy and finances in January lifted sentiment to the highest level since March 2018. The Consumer Sentiment Index rose to 100.9 in early February from 99.8 recorded in January. Overall, both the sentiment and expectations indexes moved higher. In addition, net gains in household income and wealth were reported more frequently in early February than at any prior time since 1960.

The consumer continued to spend and fuel the U.S. economy in January though the numbers were seen as modest with a slight gain from December. January Retail Sales rose 0.3% as the unseasonably mild month pushed sales at hardware and furniture stores higher. Consumer spending is a big percentage of economic growth and spending should continue as the labor market remains very strong.

The U.S. financial markets are closed on Monday in observance of Presidents Day. Most banks and government offices are closed while there will be no mail delivery. City, county, federal and state offices, libraries and superior courts are closed. Originally established in 1885 in recognition of President George Washington, the holiday became popularly known as Presidents Day after it was moved to the third Monday in February as part of 1971’s Uniform Monday Holiday Act, an attempt to create more three-day weekends for the nation’s workers.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Thursday – February 13, 2020

Inflation at the consumer level remain tame in January though the Federal Reserve expects inflation to pick up in 2020. The January Consumer Price Index (CPI) rose a scant 0.1% from December while the year over year data showed a 2.5% increase. The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. And where the CPI is closely watched by the Federal Reserve, the Core PCE is the measure of inflation that the Fed watches for its inflation targets.

Mortgage rates inched higher this week but remain near three-year lows, reports Freddie Mac. The 30-year fixed-rate mortgage rose two basis points to 3.47% with 0.7 in points and fees. A spokesperson for Freddie Mac said that with mortgage rates hovering near a five-decade low, refinance application activity is once again surging, rising to the highest level in seven years. This surge coupled with strong purchase activity means that total mortgage demand remains robust, reflective of a solid economic backdrop and a very low mortgage rate environment.

A spike in coronavirus cases in China is weighing on global stocks, however Mortgage Bond and Treasury prices are near unchanged. China’s Hubei province reported 15K new cases of the virus bringing the total to nearly 60K and 250 additional deaths. A report hit today suggesting China is under-reporting the count of affected by 100,000. Here in the U.S., stocks are modestly lower as the Dow, S&P and NASDAQ closed at record highs yesterday.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Wednesday – February 12, 2020

Mortgage rates continue to hover near historic lows this week, reports the MBA. The 30-year fixed-rate mortgage was at 3.72% for the week ended February 7, 2020. Mortgage application activity rose with the Market Composite Index, a measure of total mortgage loan application volume up 1.1%, the Refinance Index rose 5% while the Purchase Index declined 6.0%. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Despite a decline last week, purchase activity was still up almost 16% from a year ago.”

On the coronavirus front, more than 1,100 deaths and 45,000 cases concentrated in Asia have been reported with the vast majority stricken in China. However, new cases are beginning to slow and that is mildly positive. To combat an economic fallout from the outbreak, Chinese officials continue to signal more stimulus ahead to promote growth which is boosting stocks around the globe, including here in the U.S.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Tuesday – February 11, 2020

Small business owners across the U.S. were more positive about conditions as the new year kicked off as owners raise wages and invest in their business. The NFIB Small Business Optimism Index rose 1.6 points in January to 104.3, a reading among the top 10% of all readings in the 46-year history of the survey. The economic expansion continues its historic run as small businesses enter 2020. NFIB Chief Economist William Dunkelberg said, “Small businesses continue to build on the solid foundation of supportive federal tax policies and a deregulatory environment that allows owners to put an increased focus on operating and growing their businesses.”

Fed Chair Powell is on Capitol Hill this morning in front of the House Financial Services Committee testifying on the state of the U.S. economy. In his prepared speech, Powell said, “The economic expansion is well into its 11th year, and it is the longest on record. Over the second half of last year, economic activity increased at a moderate pace and the labor market strengthened further, as the economy appeared resilient to the global headwinds that had intensified last summer.”

The continued expanding economy coupled with a strong labor market continues to boost the housing market as mortgage delinquency rates continuing to decline. The MBA reports that the delinquency rate for mortgage loans on one-to-four unit residential properties declined to a rate of 3.77% at the end of Q4 2019. “The mortgage delinquency rate in the final three months of 2019 fell to its lowest level since the current survey series began in 1979,” said Marina Walsh, MBA’s Vice President of Industry Analysis.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Monday – February 10, 2020

Fed Chair Powell will be on Capitol Hill this week in front of Congress on Tuesday and Wednesday testifying on the state of the U.S. economy. Mr. Powell’s speech to Congress was released Friday with little fanfare stating the U.S. economy grew modestly and the labor market continued to strengthen last year. Downside risks have diminished somewhat while the coronavirus poses a new concern.

The death toll from the coronavirus is nearly 1,000 while there are more than 40,000 cases. It is reported that workers are beginning to return to work in China while factories begin to slowly reopen. The problem with the coronavirus story is that it remains highly uncertain. We still don’t know where it came from and if the spread outside of mainland China will continue. U.S. stocks are higher today, having shrugged off opening losses with the Dow, S&P and NASDAQ just below all-time highs.

Fears of a slowdown in oil consumption in China have pushed prices lower in the past few weeks. The decline has pushed U.S. gas prices at the pumps lower for the second straight week. The national average price for a regular gallon of gasoline is at $2.42, down from $2.47 last week and down from $2.60 a month ago. Gas prices are $0.16 more than last year but that gap has been declining for the past two months. The highest price ever recorded was $4.11 back on July 17, 2008.

Courtesy of Mortgage Market Guide

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp