Economic news related to housing was slim, but we did get some noteworthy news on Consumer Sentiment, Retail Sales, New Jobless Claims and as usual Freddie Mac’s mortgage rates survey.
Consumer confidence dropped slightly in August, according to preliminary results from the University of Michigan’s Survey of Consumers Sentiment. The index dropped to a score of 92.9 in August, which was down slightly from July‘s figure of 93.1.
Prior to the release many economists forecasted to bump to 93.5, but the report told a different story. Those of you who follow the international markets should carefully monitor consumer sentiment over the coming months in case we see fallout from the international problems, said,” Richard Curtin, director of the Michigan Survey of Consumers. He also noted that lower prices are “starting to have an impact on consumer spending decisions since many no longer expect gas prices to quickly rebound to the previous levels.”
While Americans are still wary of the economy, it didn’t seem to have an effect on consumer spending. In fact, Bloomberg’s report points out that retail sales increased 0.6 percent in July and the Commerce Department recently revised the previous two months’ reports to be higher. This has been attributed to employment rates rising as the job market continues to improve. In fact, the July unemployment rate hit a seven-year low of 5.3 percent.
Renewed strength in personal finances largely offset slight declines in prospects for the national economy and buying conditions. The declines in prospects for the economy probably reflect the expected increases in interest rates.
Freddie Mac’s Mortgage Rate Survey reported last week that average mortgage rates rose for fixed rate mortgages and dropped for 5/1 adjustable rate mortgages. The average rate for a 30-year fixed rate mortgage rose by three basis points to 3.94 percent. The rate for a 15-year fixed rate mortgage rose by four basis points to 3.17 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.93 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and rose from 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.
Jobless claims rose to 274,000 last week from the prior week’s reading of 269,000 new jobless claims filed. Analysts expected a reading of 270,000 new jobless claims. New claims were lower by 1750 claims for the past month at a seasonally adjusted rate of 266,250 new jobless claims. This was the lowest level since April of 2000. Analysts consider the four week average a less volatile reading for new jobless claims than weekly readings, which fluctuate more due to transitory influences.
What’s Ahead for the Week?
The week we’ll get releases from the National Association of Homebuilders Housing Market Index, Commerce Department reports on Housing Starts and Building Permits and the National Association of Realtors® report on Sales of Previously Owned Homes.
What’s Ahead for the Week?
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