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Fed leaves rates alone in this week’s Markets in a Minute!

Fed leaves rates alone in this week’s Markets in a Minute!
July 28, 2017 Fred Kreger



For the Week Ending July 28, 2017

Existing Home Sales

The recent decline in pending home sales, translated into a decline in existing home sales. The latest data showed a drop of 1.8 percent for the month of June. Compared to the same time last year, existing sales
are up 0.7 percent.


On the flip-side, home prices are up a sharp 6.5 percent from a year ago. The latest median home price is $263,800. The supply of homes continues to remain a big challenge in many markets throughout the country.
Supply dropped 0.5 percent in June which places the national average at 4.3 months. The most notable concern relating to home availability is that supply is 7.1 percent lower than the same time last year.


Mortgage Bankers Association Loan Application Weekly Data

After last week’s large jump in refinances, it seems that the little upward movement in rates has quelled the brief refi excitement. The latest numbers reported from the Mortgage Bankers Association is that refinances
only increased 3.0 percent for the week ending July 21st. Purchase applications declined a minimal 2.0 percent for the same week. The good news in the latest report is that purchase applications are 8.0 percent higher than the same time last year.


FHFA House Price Index

The FHFA Index, which measures the prices of single-family homes was up 0.4 percent in May, which is the softest increase since January. However, home prices are up for this index by 6.9 percent from the same time
last year. This is the biggest year-on-year spread in 3 ½ years.


S&P Corelogic Case-Shiller House Price Index

The question people are starting to ask is “is home price appreciation slowing?”


Although the existing home sales report showed a strong increase in home prices, the latest Case-Shiller data points to more modest price growth. For the 20 major cities in which the data is based, home prices only
increased 0.1 percent for the month of May. Expectations were that home prices would be up by 0.3 percent according to the Econoday estimates. Overall home prices are higher by 5.7 percent from last year in the Case-Shiller data.


Next week’s potential market moving reports are:

• Monday July 31st – Pending Home Sales
• Tuesday August 1st – PMI Manufacturing Index, Construction Spending, ISM Mfg Index
• Wednesday August 2nd – MBA Mortgage Applications, ADP Employment Report
• Thursday August 3rd – First Time Jobless Claims, Factory Orders
• Friday August 4th – National Employment Report


As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.


Please enjoy this quick update on what happened this week in the housing and financial markets.



The Fed left policy rates unchanged at this month’s FOMC meeting. They did say though that they will begin reducing their balance sheet ‘relatively soon.’
Traders’ reactions to the Fed’s statement were also positive for mortgage rates. Speculation is the Fed will take gradual action when tightening economic
Inflation continues to come in below the Fed’s desired level of 2% and will be monitored. Low inflation is supportive of lower mortgage rates.


Existing home sales fell more than expected in June, and tight inventory has been blamed. Lack of homes has led to bidding wars and higher home prices.
However, new home sales increased for the second straight month in June. Also, the inventory of new homes on the market increased 1.1%, the highest level
in 8 years.
According to Case-Shiller, major metro area home prices were up 5.7% year-over-year in May. Inventory of existing homes for sale is around 4 months.

When it comes to work, change is inevitable, except from the vending machine.


Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
rate trends can differ from our own and are subject to change at any time.


Fred Kreger, CMC
American Family Funding
Certified Mortgage Consultant
NLMS # 1850 / 214640 BRE# 01215943 / 01371184
(661) 505-4311
28368 Constellation Road
Suite 398
Santa Clarita, CA


©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.



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