Rate Watch
Last week, the mortgage markets proved to be fairly boring. There was no significant economic release or geopolitical event that caused the markets to push rates very strongly in either direction. The Freddie Mac weekly survey fell for the 5th consecutive week. The benchmark 30-year fixed rate mortgage fell 4 basis points to 6.48 percent, falling to their lowest levels since April 6th of this year. Other products followed. The 15-year mortgages averaged 6.18 percent, down slightly from 6.20 percent the prior week. One-year adjustable rate mortgages averaged 5.60 percent, also down from 5.65 percent. All-in-all it was a good week for borrowers.
The housing sector caught most of the attention last week. Two reports on Home Sales from the National Association of Realtors (NAR) showed a sharper than expected slowdown in July. Many media outlets marked this up as the bubble bursting. However, the 2006 housing market is the third strongest in history. Only in comparison to the previous two record breaking years could this year’s level of housing activity be viewed as weak.
This week should present us with a little more activity than last week. Most importantly, the August Employment Report will be released on Friday. The health of the labor market is perhaps the single biggest factor in the performance of the economy and the Employment report is the most closely watched economic data of the month. Early estimates are for about 125,000 new jobs in August.
A few other significant reports will be coming out as well. On Wednesday, the first revision to 3rd quarter Gross Domestic Product (GDP) will be released. GDP is the broadest measure of US economic activity, and it is revised twice during each quarter. The two major national manufacturing indexes, the ISM and Chicago PMI, are also on the schedule at the end of the week.
While the second half of the week will be packed with economic data, the first half may focus more on the Fed. On Tuesday, the minutes from the August 8 FOMC meeting will be released. This detailed description of the discussion during the last Fed meeting will be eagerly devoured and scrutinized for clues about future policy.
For more information about rates, mortgages and the state of the real estate economy visit our Blog at houstonratesheet.blogspot.com.
posted by Vincent Biondillo @ 9:42 AM
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