South Orange County Blog from Bob Phillips

What’s Ahead For Mortgage Rates This Week – July 13, 2015

Whats-Ahead-Mortgage-Rates-6Last week’s scheduled economic events were few due to the Independence Day holiday. Freddie Mac’s weekly survey of mortgage rates brought good news as mortgage rates fell across the board. The Federal Reserve released the minutes of its most recent Federal Open Market Committee (FOMC) meeting and weekly jobless claims rose.

Job Openings Rise to Highest Level Since 2000

The Labor Department reported that U.S. job openings rose from April’s reading of 5.33 million to 5.36 million job openings in May. This was the highest reading for job openings since the report’s inception in 2000. Private sector job openings rose  to 4.85 million, an increase of 16 percent. Government jobs rose increased by 511,000 open jobs from April’s reading of 430,000 job openings. Based on the Labor Department’s report of 8.67 million unemployed workers, there were 1.60 job seekers for each job opening in May as compared to 2.10 job seekers for each job available in May 2014. There were approximately 1.80 job seekers for each job available when the recession started in December 2007.

FOMC Minutes: Fed Issues No Firm Date for Raising Rates

On Wednesday, the Federal Reserve released the minutes of June’s FOMC meeting, during which nine of ten committee members indicated that they were not ready to raise the federal funds rate. One FOMC member indicated that they were willing to wait for another meeting or two to raise rates. While FOMC has hinted at the likelihood of raising rates this fall, committee members are wary of moving too quickly and cited developments in China and Greece as concerns that contributed to the committee’s current wait and see position. When the Fed does raise its target rates from 0.00 percent, consumers can expect higher mortgage and loan rates.

Freddie Mac: Mortgage Rates Fall, Jobless Claims Rise

Mortgage rates fizzled last week with Freddie Mac reporting average rates lower for all types of mortgages. The average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent and discount points unchanged at 0.60 percent; the average rate for a 15-year fixed rate mortgage was also four basis points lower at 3.20 percent. Average discount points for a 15-year mortgage fell from 0.60 to 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by six basis points to 2.93 percent with discount points unchanged at 0.40 percent.

According to the Labor Department, weekly jobless claims rose to 297,000 new claims filed as compared to 282,000 new claims filed the previous week. There were no estimates for last week’s jobless claims due to the holiday.

What’s Ahead

This week’s scheduled economic reports include Retail Prices, Retail Prices Except Automotive and the NAHB Housing Market Index. The Commerce Department is set to release monthly readings for Housing Starts and Building Permits. In addition to Freddie Mac’s report on mortgage rates and the Labor Department’s report on new jobless claims, the University of Michigan will wrap up the week with its Consumer Sentiment report.

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What’s Ahead For Mortgage Rates This Week – Sept 22, 2014

Whats-Ahead-Mortgage-RatestLast week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

The FOMC statement said that committee members find the economy to be improving at a moderate pace and currently strong enough to further reduce the QE3 monthly asset purchases. The Fed seeks to achieve and sustain its dual mandate of maximum employment and an inflation rate of 2.00 percent. While the unemployment rate is lower than the Fed’s benchmark of 6.50 percent, FOMC members cited concerns that the labor force is underutilized and that labor markets, while recovering, could use further improvement. The Fed repeated its customary statement that the Fed’s monetary policies are not on a pre-determined course, and that FOMC members continually review and interpret developing financial and economic news as part of their decision-making process.

Chair Yellen explained during her press conference that it is not possible to provide a specific date when the Fed will change its target federal funds rate. Economists and media analysts expressed concerns that raising the target federal funds rate, which is currently at 0.00 to 0.250 percent, could cause overall interest rates to rise. Chair Yellen said that she expects the current target federal funds rate to remain for a “considerable time” after the QE asset purchases cease. She also said that it is impossible to provide a specific date when the Fed will change its target federal funds rate and cited multiple influences considered by FOMC when changing monetary policy.

Home Builder Confidence Grows, Housing Starts Fall

The National Association of Home Builders Housing Market Index rose by three points in September for a reading of 59. Analysts had predicted an index reading of 56 against August’s reading of 55. September’s reading was the third consecutive reading above 50. Stronger labor markets were cited as supporting the higher reading, but builders were also concerned by tight mortgage credit standards. Any reading above 50 indicates that more builders perceive market conditions for new homes as positive as those that do not.

August’s housing starts were inconsistent with the Home Builders Index; according to the Department of Commerce, construction of new homes fell by 14.4 percent from July’s reading to 956,000. Analysts expected 1.03 million starts against July’s reading of 1.12 million homes started.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. Average mortgage rates rose across the board with the rate for a 30-year fixed rate mortgage 11 basis points higher at 4.23 percent. The rate for a 15-year mortgage also rose by 11 basis points to 3.37 percent and the rate for a 5/1 adjustable rate mortgage rose from 2.99 to 3.06 percent. Average discount points were unchanged for all mortgage types at 0.50 percent.

New weekly jobless claims dropped to 280,000 against an expected reading of 305,000 and the prior week’s adjusted reading of 316,000 new jobless claims. The original reading for the prior week was 315,000 new jobless claims. The less volatile four-week average of new jobless claim fell by 4,750 new claims to a reading of 299,500 new claims.

What’s Ahead

This week’s scheduled economic news brings multiple housing-related reports. The National Association of REALTORS® will release its Existing Home Sales report for August. Case-Shiller’s monthly Housing Market Index report and the FHFA’s Home Value report will bring new light to national market trends. The Department of Commerce will release its New Home Sales report, and as usual, Freddie Mac’s weekly report on mortgage rates will come out on Thursday.

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FOMC Statement: Asset Purchases to end in October, Labor Market Stronger

Fed-Reserve-FOMC-StatementThe Federal Reserve’s Federal Open Market Committee (FOMC) released its customary statement at the conclusion of its meeting on Wednesday. FOMC members oversee the Fed’s monetary policy. In recent months, investors and economists have speculated on whether or not the Fed would continue tapering its asset purchases under its latest quantitative     easing (QE) program, and whether the Fed would raise its target federal funds rate of 0.00 to 0.250 percent.

According to its statement, FOMC members plan to continue tapering monthly asset purchases of Treasury securities and mortgage-backed securities until asset purchases under the QE program conclude in October. FOMC statements have repeatedly indicated that members do not foresee raising the target federal funds rate for a “considerable period” after the QE asset purchases cease. Wednesday’s FOMC statement reasserted this position, and said that the committee may keep   the current target federal funds rate at its current level for “some time” after employment levels and inflation reach    normal levels.

Committee member and Philadelphia Federal Reserve Bank President and CEO Charles I. Plosser objected to use of the term “considerable period” as being “…time dependent and not reflecting economic progress made toward the committee’s goals.”

The committee’s comments about asset purchases and the target federal funds rate included the usual reminder that asset purchases and determination of the target federal funds rate are not on a predetermined course and are subject to adjustment should economic conditions merit changes in FOMC monetary policy.

FOMC Concerned with Housing Markets, Unemployment

The committee’s statement said that while FOMC members noted improvements in labor markets, but the unemployment rate remains elevated. The FOMC statement noted that “a range of labor market indicators suggest that there remains significant underutilization of labor resources.”

In spite of encouraging labor market reports, FOMC members remain concerned about overall labor market conditions, and are not relying on the national unemployment rate alone as an accurate measure of labor market health.

Home prices continue to rise, but at a slower pace in many areas. On a positive note, the statement indicated that FOMC members found that the likelihood of inflation running consistently below the committee’s target rate of 2.00 percent was “diminished somewhat.”

While Wednesday’s FOMC statement reflected signs of an ongoing economic recovery, it’s evident that FOMC members plant to keep a close eye on factors that impact their expectations for the economy.

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What’s Ahead For Mortgage Rates This Week – July 14, 2014

What's Ahead For Mortgage Rates This Week July 14 2014Last week brought news from the Fed as two Federal Reserve Bank Presidents made speeches and the Federal Open Market Committee (FOMC) of the Fed released the minutes of its last meeting. The minutes reveal the Fed’s intention to wrap up its bond-buying program in October with a final purchase of $15 billion in mortgage-backed securities (MBS) and Treasury bonds. No economic news was issued Monday following of the 4th of July holiday.

Further indications of a strengthening labor market were seen. May job openings reached their highest level since June 2007, and quits and layoffs fell from April’s reading of 4.55 million to 4.50 million. Weekly jobless claims fell to 304,000 against expectations of 320,000 new jobless claims and the prior week’s reading of 315,000 new jobless claims.

Fed Speeches Address Inflation, Banks Too Big to Fail

Tuesday’s speech by Minneapolis Fed Bank president Narayana Kocherlakota calmed concerns over inflation; Mr. Kocherlakota said that the Fed expects inflation to remain below its target rate of two percent for several more years. He tied low inflation to the unemployment rate and said that the nation’s workforce is not fully utilized in times of low inflation, and cautioned that June’s national unemployment rate of 6.10 percent “could well overstate the degree of improvement of the U.S. labor market.”

Stanley Fischer, the Fed’s new vice-chairman, spoke before the National Bureau of Economic Research last Thursday. Mr. Fischer addressed the issue of breaking up the nation’s largest banks to eliminate the government’s exposure to banks too big to fail. He said that it wasn’t clear that breaking up the largest banks would end federal bailouts of banks considered too big to fail. Mr. Fisher also said that breaking up the biggest banks would be “a complex task with an uncertain payoff.”

Mr. Fischer also said that any efforts to prevent a housing bubble should focus on the supply side and cautioned that “measures aimed at reducing the demand for housing are likely to be politically sensitive.”

FOMC Minutes Reveal End Date for Bond Purchases

The minutes of the Fed’s last FOMC meeting indicate that the Fed plans to continue bond purchases at the rate of $10 billion per month with a final purchase of $15 billion in October. FOMC members re-asserted their oft-stated position that the Fed’s target interest rate of 0.00 to 0.25 percent will not change for a considerable time after the bond purchase program ends.

Mortgage Rates Rise

Average mortgage rates rose across the board last week. The average rate for a 30-year fixed rate mortgage increased by three basis points to 4.15 percent; discount points were also higher at 0.70 percent. The average rate for a 15-year fixed rate mortgage rose by two basis points to 3.24 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by one basis point to 2.99 percent with discount points unchanged at 0.40 percent.

What’s Ahead

This week’s scheduled economic news includes retail sales and retail sales without the auto sector, Fed Chair Janet Yellen’s testimony, the Fed’s Beige Book report and the NAHB Homebuilder’s Market Index. Housing Starts, Consumer Sentiment and Leading Economic Indicators round out the week’s economic reports.

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FOMC Minutes: Committee Discusses “Normalizing” Policy

Fed-Minutes-Released-252April’s meeting of the Fed’s Federal Open Market Committee was held along with the Board of Governors of the Federal Reserve System.

Meeting minutes released Wednesday indicated the committee’s interest in “normalizing” its monetary policy. This included the FOMC’s ongoing commitment to tapering its asset purchases under its quantitative easing program.

The committee agreed to taper the Fed’s monthly asset purchases by $10 billion to $45 billion per month. Committee members discussed raising the target federal funds rate, which now stands at 0.00 to 0.25 percent, but the minutes clearly stated that this topic was undertaken as part of “prudent planning, and did not indicate that normalization would necessarily begin sometime soon.”

The FOMC minutes reflected the committee’s concern with achieving a balance between normalizing the Fed’s monetary policy and keeping short-term interest rates under control.

Meeting attendees considered methods for managing interest rates and considered potential impact of each method discussed on overall financial stability.

Importance Of Early Communication

Meeting participants discussed the importance of early communication of pending changes to the Fed’s monetary policy, and agreed that advising the public “well before the first steps in normalizing policy become appropriate.”

Early communication to the public of planned changes was viewed as a means of providing clarity and credibility to FOMC policy decisions and help FOMC achieve its statutory goals of maximum employment, stable pricing and moderate long term interest rates.

Potential Impact Of Achieving Normalcy

FOMC members discussed the possible impact of tools considered for use in normalizing the economy on the following:

  • Fed control over short-term interest rates
  • The Fed’s balance sheet and Treasury remittances
  • Functionality of Federal Funds Market
  • Financial stability in normal times and times of stress

The minutes noted that the Fed has never used any of the methods discussed while the Fed held a large balance sheet, and recommended that flexibility in using tools for achieving normal fiscal policy.

No decision was made about normalizing current monetary policy; FOMC and Fed Board members agreed that further study and analysis were needed before any decisions would be made.

Fed: Mortgage And Refinance Applications “Tepid”

The FOMC minutes characterized the level of mortgage and refinance applications through March as tepid, due to increasing mortgage rates and home prices.

While a survey of senior loan officers revealed that mortgage credit had been loosened for applicants with prime credit, mortgage credit remained tight for those with less than excellent credit.

The unemployment rate held steady at 6.70 percent and remained above the FOMC’s benchmark of 6.50 percent. There was some good news as the workforce expanded and the ranks of the long-term unemployed decreased.

Stable employment is important to potential home buyers; if unemployment levels continue to fall, numbers of home buyers are likely to increase.

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Fed Minutes Predicts Tapering Of Quantitative Easing Program

Fed Meeting Minutes Display Strong Signs Of Economic ReceoveryHousing Starts exceeded expectations and also beat October’s reading of 889,000. November housing starts were posted at 1.09 million against a consensus of 963,000.

This reading is more in line with the NAHB/Wells Fargo Home builder Market Index, which reached a four month high with December’s reading.

With that threat resolved and a new federal budget passed, builders can now proceed without worrying about setbacks caused by government shutdowns and legislative gridlock.

Building permits issued in November were slightly lower at 1.01 million than October’s reading of 1.04 million. Viewed as an indicator of future construction, and ultimately, available homes, it is not unusual for construction and permits to slow during the winter months.

FOMC Statement And Chairman Bernanke’s Last Press Conference

Throughout 2013, strong signs of economic recovery have led to predictions of the Federal Reserve tapering its quantitative easing program.

As each FOMC meeting approached, analysts predicted that the Fed would start reducing its $85 billion purchases of Treasury and mortgage-backed securities.

The asset purchases are part of the government’s quantitative easing program that was implemented to keep long-term interest rates and mortgage rates low.

The cut finally came on Wednesday as the FOMC made its customary post-meeting statement. Effective in January 2014, the Fed will reduce its monthly purchases by $10 billion.

The QE purchase will be split between $40 billion in Treasury securities and $35 billion in MBS. The Fed expects that the economy will continue recovering at a moderate pace.

The FOMC statement noted that the Fed will continue monitoring inflation, which remains below the Fed’s target rate of 2.00 percent, and the national unemployment rate, which remains above the Fed’s target rate of 6.50 percent.

The statement noted that asset purchases are not on a predetermined course, and that the Fed will continue to closely monitor labor market conditions, inflation pressure and economic developments in the U.S. and globally.

The Fed did not change its target federal funds rate of 0.00 to 0.25 percent, and would not do so at least until unemployment falls to 6.50 percent. Changes to policy accommodation are made with the Fed’s dual goal of achieving an inflation rate of 2.00 percent and achieving maximum national employment goals.

Bernanke Press Conference

Mr. Bernanke repeated key points of the FOMC statement, and noted that “highly accommodative monetary policy and waning fiscal drag” is helping with the economic recovery, but that the economy has much farther to go before it can be considered fully recovered.

Mr. Bernanke said that FOMC members saw the unemployment rate dropping from 7.00 percent in November 2013 to 6.30 to 6.60 percent in the fourth quarter of 2014. Improving labor markets and rising household spending were cited as signs of economic recovery.

Mr. Bernanke mentioned concerns about the high unemployment and underemployment rates and said that the Fed’s benchmarks for unemployment and inflation would not automatically trigger reductions in its QE asset purchases.

He also said that the committee did not expect to adjust the target federal funds rate immediately after the national unemployment rate reaches 6.50 percent.

Mr. Bernanke repeated that the Fed’s actions regarding monetary policy and QE would be dependent on in-depth review of ongoing financial and economic developments, but said that further tapering of QE purchases is likely if the economy stays on its present course of moderate improvement.

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Fed Meeting Minutes Show Hope In Economic Growth

Fed Meeting Minutes Show Hope In Economic GrowthThe minutes of the Federal Reserve’s Federal Open Market Committee meeting held October 29 and 30 were released Wednesday. The meeting began with a report from the Manager of the System Open Market Account and included updates on developments within domestic and foreign financial markets.

According to the report, no intervention by the Federal Reserve was required on foreign currencies during the period between the last and current FOMC meetings.

FOMC: Key Data Delayed by Shutdown

The FOMC noted moderate economic growth in the period since its last meeting, but also noted that several federal agencies delayed release of key statistics due to the government shutdown in early October. The FOMC minutes included updates on several economic sectors including:

Labor: Private non-farm payrolls for September increased at a slower rate than for August and the unemployment rate remains high at 7.20 percent. The FOMC has set a target unemployment rate of 6.50 percent as a benchmark for considering changes to the Fed’s quantitative easing program, which supports lower long-term interest rates and mortgage rates.

A high rate of part-time employment and a slight drop in full-time employment may indicate why would-be home buyers remain on the sidelines. FOMC members noted that while weekly unemployment claims rose during some weeks in October, this was likely fall-out related to the government shutdown.

Manufacturing: Production rose slightly, but was flat other than for motor vehicles. The committee expected to see gains in production in the near term.

Personal Consumption Expenditures: This sector rose in August and retail sales excluding autos were significantly higher in September. Factors impacting consumer spending were mixed. Homeowners enjoyed increasing home prices and home equity, but overall consumer sentiment declined even as disposable income increased in August.

Housing: The committee said that little current data was available for the housing sector due to the shutdown. Building permits and housing starts for single family homes rose in August. After a significant drop in July, sales of new homes rose in August while sales of existing homes fell. Pending home sales also fell during August and September.

Quantitative Easing: FOMC members decided not to alter its current QE program during its September meeting; this caused investors and analysts to revise their expectations for the Fed taking action to reduce its current pace of $85 billion in monthly bond purchases.

Expectations for the total amount of asset purchases under QE were revised upwardly, which suggested that no major changes in current Fed monetary policy is anticipated.

Overall, the minutes of October’s FOMC meeting echoed the committee’s recent perception of moderate economic growth as expressed during its 2013 meetings, and its intention to maintain asset purchases and the target federal funds rate at current levels in the coming months.

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Fed Meeting Minutes Release Hope Of A Stronger Economy With New Measures

Fed Meeting Minutes Release Hope In A Stronger Economy With New MeasuresThe Federal Reserve’s Federal Open Market Committee released its customary after-meeting statement on Wednesday. In the context of meeting its dual mandate of stabilizing pricing and achieving maximum employment.

The FOMC statement indicated that although the economy has improved in areas including household spending and labor market conditions, the national unemployment rate remains high and the housing market recovery has slowed.

Fed Says Fiscal Policy Restraining Economic Growth

The FOMC statement said that current fiscal policy and “retrenchment” is restraining economic growth as evidenced by failure to achieve benchmarks set by FOMC as indicators of a healthy economy. Benchmarks include a national unemployment rate no higher than 6.50 percent and achieving an inflation rate of 2.00 percent.

September’s unemployment rate was 7.20 percent and inflation has run consistently below the FOMC objective. Not to be confused with the FOMC statement’s references to monetary policy, the term fiscal policy refers to the government’s budgetary policy.

Committee Sees Moderate Economic Growth, Seeks Improvement

While the Fed cited “moderate economic growth,” the FOMC statement clearly indicated that the committee is not ready to alter its current policy of quantitative easing and estimates that it will maintain the target federal funds rate at between 0.00 percent and 0.250 percent for a considerable time after the QE bond-buying program is phased out.

The Federal Reserve currently purchases $40 billion per month in mortgage-backed securities and $45 billion in Treasury securities as part of its QE program. The Fed will also continue its existing policy of reinvesting principal payments it receives on holdings of agency debt and MBS, as well as selling maturing Treasury securities at auction.

These activities are part of FOMC’s strategy for supporting low mortgage rates and mortgage markets while making “broader financial conditions more accommodative.” The Fed expects these measures to assist with a stronger economic recovery and stabilizing inflation at the Fed’s target rate.

Fed To Continue Monitoring Economic, Financial Developments

FOMC reasserted its position that any decision to alter current QE policy is not solely subject to economic benchmarks, but will be based on the Committee’s close review of labor market conditions, inflation pressures, and financial developments.

FOMC commented in its statement that it will continue to review economic and financial conditions in the “coming months” and will decide when to taper its monthly asset purchase according to what is learned.

This suggests that changes to the present QE policy are not anticipated for several months, and that the effects of QE combined with dampened speculation may help with keeping mortgage rates lower.

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What’s Ahead For Mortgage Rates This Week – October 7, 2013

Posted in Financial Reports, FOMC Minutes, Housing Analysis, Mortgage Rates, Real Estate Trends, The Economy by southorangecounty on October 7, 2013

What's Ahead For Mortgage Rates This Week- October 7, 2013This week’s economic news commentary has been dominated by the “what ifs” of a government shutdown; opinions of potential consequences are limited only by the number of commentators sharing their opinions.

Unfortunately, more concrete examples of the shutdown were evident last Tuesday and Friday.

The Department of Commerce delayed release of August’s Construction Spending report that were due last Tuesday and The Bureau of Labor Statistics delayed the release of September’s Non-farm Payroll and Unemployment that were due last Friday.

The ADP Employment report for September posted a reading of 166,000 private sector jobs added against expectations of 180,000 new jobs added. September jobs added surpassed August’s reading of 159,000 new jobs added in the private sector.

Mortgage Rates Remain Near Record Lows

Freddie Mac’s Primary Mortgage Market Survey released Thursday brought a third consecutive week of falling mortgage rates. 30-year fixed rate mortgages had an average rate of 4.22 percent down from 4.32 percent the previous week.

The average rate for a 15-year fixed rate mortgage fell by eight basis points from 3.37 percent to 3.29 percent and the average rate for a 5/1 adjustable rate mortgage fell to 3.03 percent from 3.07 percent.

Discount points were unchanged from last week at 0.70 percent for both 30-year and 15-year fixed rate mortgages and rose from 0.50 percent to 0.60 percent for 5/1 adjustable rate mortgage loans.

Weekly Jobless Claims were lower than projected. The reading of 308,000 new jobless claims was better than the 313,000 new jobs expected, but was higher than the prior week’s 307,000 new jobless claims.

Whats Coming Up Next

This week’s scheduled economic reporting is also subject to adjustment if the federal government’s budget is not resolved. The most recent FOMC meeting minutes are due on Wednesday; if released they are expected to provide details about the Fed’s decision not to change its current quantitative easing program.

Weekly jobless claims and Freddie Mac’s PMMS survey of average mortgage rates are due Thursday. The University of Michigan Consumer Sentiment Index for October is set for release on Friday.

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What’s Ahead For Mortgage Rates This Week – August 26, 2013

What's Ahead For Mortgage Rates This Week- August 26, 2013Last week brought mixed economic news, but Leading Indicators released Thursday suggest that the U.S. economy is growing at a moderate rate.

Mortgage rates for fixed rate loans were higher, but the average rate for a 5/1 adjustable rate mortgage was unchanged from the prior week. Weekly jobless claims were also higher.

The National Association of REALTORS released its Existing Home Sales report for July and reported existing home sales came in at 5.39 million on an annualized basis.

This reading surpassed expectations of 5.21 existing homes sold as well as June’s reading of 5.06 million existing homes sold on an annualized basis.

FOMC Minutes Released, Mortgage Rates Rise

The minutes for the July 31 FOMC meeting were released, and emphasized the likely “tapering” of the Fed’s quantitative easing program possibly as early as September, though no dates have been set. Many of the FOMC members support reducing the $85 billion in monthly securities purchases made by the Fed; fewer members supported tapering the asset purchases sooner than planned.

Previous announcements by the Fed regarding its plan to reduce QE have created erratic responses in financial markets, but the release of the meeting minutes seemed to cause a sharp rise in mortgage rates.

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage moved from the prior week’s average rate of 4.40 percent to 4.58 percent; average discount points moved up from 0.70 to 0.80 percent. Average rates for a 15 year fixed-rate mortgage also rose from 3.44 percent to 3.60 percent with average discount points moving from 0.60 to 0.70 percent.

Average rates for a 5/1 adjustable rate mortgage were unchanged from the previous week at 3.21 percent with average discount points paid at 0.50 percent.

FHFA reported that home prices for homes with mortgages owned by Fannie Mae and Freddie Mac rose by 7.70 percent year-over-year in June, home prices rose slightly from May’s year-over-year- rate of 7.60 percent.

Leading Economic Indicators (LEI) for July rose by 0.60 to a reading of 96.0; this exceeded expectations for an increase of 0.50 percent. The LEI measures the health of the economy by measuring 10 top economic sectors; eight of 10 factors measured increased; these were led by the spread on interest rates, availability of credit, stock prices and permits issued for building new homes.

New home sales for July were lower than expected at 394,000; Wall Street expected new home sales to come in at 485,000 on a seasonally-adjusted annual basis against the revised number of 455,000 new home sales reported for June. 497,000 homes were initially reported sold in June. Hew home sales gained by 6.80 percent year-over-year in July.

What’s Coming Up

Scheduled economic news for this week includes the Case-Shiller Home Price Index, and Consumer Confidence on Tuesday, Pending Home Sales will be out Wednesday. Thursday brings Weekly Jobless Claims, and Friday brings consumer spending and the University of Michigan’s consumer sentiment report.

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