The Home Buyer's Korner

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August 11th, 2014

What’s Ahead for the Week of August 11, 2014

The Home Buyer's Korner LogoLast week’s housing related news continues to point to further economic growth. However, the Federal Reserve’s Survey of Senior Loan Officers indicated that credit standards for commercial and industrial loans, as well as credit cards are easing, while mortgage credit standards are more stringent than in 2005 and a likely contributor to a slowing housing market. The survey also noted new Qualified Mortgage rules has slowed approval of prime jumbo mortgages and non-traditional home loans.

Mortgage applications however, rose by 1.6 percent in the preceding week, as refinancing and home purchasing applications increased in-light of rising interest rates.

Other economic news related to housing showed strong rebounds as Manufactures’ Shipment, Inventory & Orders hit an 8-1/2 year high last month and factory orders surged in June; pointing to expectations of solid economic growth in the third quarter. Tuesday’s reports added to employment and consumer spending data suggesting sustained momentum in the economy that could bring the Federal Reserve closer to raising interest rates.

The ISM Non-Manufacturing Index said business is booming and that services expand at their fastest pace since 2005. The pace of growth in the U.S. services sector also hit its highest in 8-1/2 years in July. The reading blew past economists’ forecasts for 56.3. The index uses a above 50 as indicates of expansion in the sector.

Jobless Claims tumbled to 289,000, as compared to predictions of 305,000 and furthering hopes of a recovering economy.

Freddie Mac’s Primary Mortgage Market Survey reported that last week’s mortgage rates were mixed. Mortgage rates for a 30-year fixed rate mortgage averaged 4.14 percent with discount points of 0.70 percent against the previous week’s reading of 4.12 percent with discount points of 0.60 percent.  15 year mortgage rates averaged 3.27 percent with discount points of 0.60 percent; an increase of four basis points, but discount points fell from 0.70 percent to 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was 2.98 percent, a drop of two basis points with discount points unchanged at 0.50 percent.

What’s Ahead for the Week?

We’re going to have a light week for housing related news this weekRetail Sales Report with and without automotive sales will be available Wednesday, Average Mortgage Rates and Weekly Jobless Claims will be reported on Thursday.