- After four weeks of declines, mortgage rates remained flat last week, according to the Freddie Mac Primary Mortgage Market Survey released August 21st. Over the summer, rates have come down and purchase applications have outpaced 2024; however, homebuyers continue waiting on the sideline for rates to further decrease.
- Mortgage applications decreased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 15th. “Mortgage rates increased slightly last week. Applications were down as a result, driven by a 16 percent decrease in VA applications, which are typically a volatile segment of the market,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “FHA refinance applications increased over the week, as the FHA rate remained competitive relative to other loan types. Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace. Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges.”
- Retail sales in July rose 0.5% from the prior month, a rise that was slightly below Wall Street forecasts but a sign the consumer continues to steady the ship after a dramatic drop in spending this spring. Economists had expected retail sales to rise 0.6% from the prior month in July, according to data from Bloomberg. Excluding autos and gas, retail sales rose 0.2% last month. Friday’s report marks the second straight month retail sales rose after two months of declines in May and April, with May’s 0.9% heightening fears over the health of the US consumer. June’s retail sales were also revised higher on Friday, with new data showing sales jumped 0.9% from the prior month, more than the 0.6% rise initially reported. “Retail sales do not give the economy a complete bill of health, but at least the consumer is not in headlong retreat and the outlook for continued moderate economic growth this quarter is positive,” said Chris Rupkey, chief economist at FWDBONDS.
- Federal Reserve officials worried at their July meeting about the state of the labor market and inflation, though most agreed that it was too soon to lower interest rates, minutes released Wednesday showed. The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting. “Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes noted. While “a majority of participants judged the upside risk to inflation as the greater of these two risks” a couple saw “downside risk to employment the more salient risk. Governors Christopher Waller and Michelle Bowman voted against the decision to hold rates steady, preferring instead that the Federal Open Market Committee start lowering its key rate. This was the first time that multiple governors voted against a rate decision in more than 30 years.
