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Why did rates drop? Find out in this week’s Markets in a Minute!

Why did rates drop? Find out in this week’s Markets in a Minute!
June 1, 2018 Fred Kreger

 

 

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For the Week Ending June 1, 2018

 

 

The Markets:

Investors are not sure what to make of the ever-changing landscape of potential changes in trade policies as well as geo-political pressure. From President Trump once again threatening heavy tariffs on certain imports, to the latest concerns over Italy potentially leaving the Euro, the markets are experiencing significant daily swings in value. This appears to be the new norm for investing which is causing more and more traders to make investment decisions based on short term stock holding strategies.

 

S&P Core-Logic HPI:

The latest home data show prices are still rising. The latest data just released for March shows home prices are up 6.5% from the same time last year. This is the same spread as the prior month. Seattle, Las Vegas, and San Francisco lead the country in appreciation with 13.0 percent, 12.4 percent, and 11.3 percent respectively.

 

Pending Home Sales:

After two consecutive months of modest home price increases, the latest data for April showed sales declined to the third-lowest level in the last year. This report was furnished by the National Association of Realtors®, and measures contract signings. The decline of 1.3 percent is being caused by the continued tight inventory throughout the country, that seems to be getting even worse.

 

Adding to the challenge of home sales, is rising interest rates and higher gas prices. Both of these factors could cause would-be buyers to delay purchase decisions.
The one potential uplift to the market could be that if demand eases, price appreciation will slow. Homeowners may then realize the market has peaked and look to cash out, which could begin the process of making more homes available and bringing more balance back into the market.

 

Mortgage Application Activity:

The Mortgage Bankers Association latest report on loan activity shows purchase applications declined by 2.9 percent. Refinances also dropped by 5.0 percent.
Rising mortgage rates are starting to play a factor in home purchase activity.

Next week’s potential market moving reports are:

• Monday June 4th – Factory Orders
• Tuesday June 5th – JOLTS Report
• Wednesday June 6th – MBA Mortgage Applications
• Thursday June 7th – First Time Jobless Claims
• Friday June 8th – Wholesale Trade

 

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.

 

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First quarter economic growth was solid though slightly lower than expected at 2.2%. An improving economy can pressure rates higher.

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Mortgage rates improved as overseas investors took to the safety of U.S. bonds. Political turmoil in Italy was the largest catalyst as their markets crashed.

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Consumer spending increased in April, amid rising inflation. Inflation and a strong labor market will likely lead to a Fed rate increase at June’s FOMC meeting.

 

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Home price gains may be slowing down as mortgage rates creep up. March prices were unchanged compared to February, according to Case-Shiller.

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Even still, values rose 6.5% nationally over last year. Housing prices are now 7.8% above their previous peak during the housing boom of 2006.

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Pending home sales fell 1.3% in April compared to March. Most economists blame low inventory rather than slightly higher mortgage rates as the cause.

 

 

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I used to be a banker, but then I lost interest.

 

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.

 

Sincerely,

Fred Kreger
American Family Funding
Certified Mortgage Consultant
NLMS # 1850 / 214640 BRE# 01215943 / 01371184
(661) 505-4311
Fred.Kreger@affloans.com
28368 Constellation Road
Suite 398
Santa Clarita, CA
91355

www.fredkreger.com
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©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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