Well, it’s been a while since I have posted- please forgive me- I have been busy trying to juggle all the balls in the air-
We have been in another very volatile week for mortgage rates- today the market has improved dramatically- rates are again at all time low’s– underwriters are not freaking out quite so much, appraisals are coming in at value or higher,… we are at a perfect time to have people find homes and get loans– let me know what I can do to help you! Here is what is happening to the mortgage markets–
Jobs Fall Short
The main focus this week was the June Employment report. Rising expectations during the week pushed mortgage rates higher ahead of the report. When the Employment data came in far below expectations, though, mortgage rates improved significantly and ended the week a little lower.
Against a consensus forecast of 125K, the economy added just 18K jobs in June, the lowest level since September 2010, and the figures from the prior two months were revised lower by 44K. The Unemployment Rate rose to 9.2% from 9.1% in May. Average Hourly Earnings, a proxy for wage growth, were unchanged from May, below the consensus for a rise of 0.2%. In short, bright spots were hard to find.
Following a series of stronger than expected economic reports in recent weeks, the Employment report was certainly a surprise. The question for investors is how much weight to place on this report in determining the economic outlook. Does this mean that the economy is recovering more slowly than previously thought? Or is it that the jobs data simply operates with a small lag? There is little doubt that the US economy slowed during the first half of the year, primarily due to rising oil prices and the Japanese earthquakes. The impact of these obstacles was expected to be temporary, and nearly all the economic data in recent weeks appeared to support this. This Employment report will certainly make investors more cautious about the pace of future economic growth, but they will not overlook the wide range of other data which suggests that growth is accelerating. With mortgage rates at such low levels, solid evidence of a sustained deterioration in growth likely will be needed for rates to move much lower.
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| Week Ahead
In a packed week, the most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Thursday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Friday. The FOMC Minutes from the June 22 Fed meeting will be released on Tuesday. The Trade Balance, Import Prices, and Consumer Sentiment will round out the schedule. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. But all in all rates are absolutely wonderful! I have been closing more loans lately with less “stuff” asked for by the underwriters- we are in a perfect time- home prices are affordable and rates are low— what are people waiting for?♥ |
