Last week we didn’t get a lot of economic news related to housing due to the Independence Day holiday. The Federal Reserve did however released its minutes from the most recent Federal Open Market Committee (FOMC) meeting, Freddie Mac’s provided its weekly survey of mortgage rates and we received the weekly jobless claims report.
The FOMC Minutes didn’t reveal any firm date on raising interest rates. Last week, the Federal Reserve released its minutes of June’s FOMC meeting and we found out that nine of ten committee members weren’t 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. Previously FOMC members have hinted they were likely to raise rates this fall, but committee members are wary of moving too quickly. That good news for home buyers and in light of recent events in China and Greece, their concerns appear well founded. However, the European Union did reach a new bailout deal with Greece, while we await more news on Chinese markets. I still believe the Central Bank is on target to target to raise rates from 0.00 percent and home buyers can expect higher mortgage rates in September. If you’ve been thinking about buying a home now is the time to start looking and locking in your rate before heading higher.
Mortgage rates came down last week with Freddie Mac reporting average rates lower for all mortgage types. The average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent and discount points remained 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, with discount points falling 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.
U.S. Job Openings rose from April’s reading of 5.33 million to 5.36 million job openings in May and 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.
What’s Ahead for the Week?
We’ll get reports that include Retail Prices, with and without Automotive and the NAHB Housing Market Index. The Commerce Department will release its reading on monthly Housing Starts and Building Permits and the University of Michigan will provided its data on Consumer Sentiment. As usual we get Freddie Mac’s report on mortgage rates and the Labor Department’s Jobless Claims.
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