Houston's Rate Sheet

Not much movement in mortgage rates last week. Since rates had moved an astonishing 33 basis points in the week prior, it was a welcome event. Although flat on the week, mortgage rates were quite volatile during the week. Economic reports gave mixed signals regarding the direction of economic growth. On Thursday, Existing Homes Sales were lower than expected, but Friday’s New Home Sales reported higher than expected numbers. Friday’s Durable Goods Orders came in higher than expected as well. Oil Prices moved down on the week, which helped relieve some fears regarding inflation. All-in-All investors seemed to not have any greater sense of the economy’s state than it did at the beginning of the week, and mortgage rates reflected it.

This morning, Bankrate.com’s overnight average on the 30-year fixed rate mortgage came in at 6.41 percent, down 1 basis point from last Monday’s report. Other products moved slightly more. The 15-year fixed rate mortgage moved up 3 basis points to 5.97 percent. The 5-year Adjustable Rate mortgage rose to 5.92 percent, up from last week’s 5.85 percent.

With the release of July’s Employment Report, this week will most surely be more interesting than last week. As we have stated many times before, the Employment Report is considered to be the most important economic report of the month. In it, we discover how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. The answers to these questions help investors gauge the future direction of the economy.

Also, this week, the first reading of 2nd Quarter Gross Domestic Product (GDP) will be released. Of all the reports, GDP represents the broadest reading of economic activity. Due to its size, it usually takes the government a little time to get everything correct, so this will be the 1st of 3 releases of these numbers. The 1st release usually has the most impact. Wall Street estimates that the economy grew 2.4 percent in the 2nd quarter.

Mortgage rates could move in either direction. Investor sentiment could move drastically based on the results of the Employment and GDP numbers. Borrowers should remain diligent and lock in interest rates at their earliest opportunity.