|For the Week Ending July 13, 2018|
The best way to describe investors this week is “fickle”. One day the sky is falling and there are great concerns about the impact of the tariffs and trade war and sell stocks. The next day, absolutely nothing has changed, and the market rally’s by over 200 points.
What is very interesting to read about and watch on financial shows is how the so-called experts are attempting to predict the direction of the economy and the market using historical trends. Anyone paying attention will tell you that historical data and trends have never been less accurate in predicting future market behavior than in today’s economy. It is simply that traditional models no longer apply to today’s economy and investor mindset.
For the longest time the Fed was attempting to increase inflation to 2.0 percent per year. As the economy started heating up, the Fed was able to accomplish this goal, and has begun raising interest rates since last year. Some say the Fed has not done enough as the latest inflation rate is not moving higher than the 2.0% target.
The latest reports on wholesale and retail prices shows inflation at the highest level in 6 years. The wholesale inflation rate leaped up to an annualized pace of 7.2%, and the prices on the consumer side jumped to 3.6%. This is sure to fire off the alarm bells at the Fed and make another interest rate increase a virtual guarantee at the next Fed meeting.
Weekly Unemployment Data:
Rates may be rising, a trade war maybe happening, but employment in the U.S. is setting records. With not only near record high employment in the U.S., first time jobless claims for the week of July 6th hit a 49-year low. Claims for the week declined by 18,000 down to 214,000.
Mortgage Rates and Activity:
The latest report from the Mortgage Bankers Association of American reported that applications for purchase loans increased 7.0 percent last week. Refinances declined by 4.0 percent.
Next week’s potential market moving reports are:
• Monday July 16th – Retail Sales
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.
|Consumer prices barely rose in June, but the underlying trend points to inflation. Rising inflation will likely lead to more Fed rate increases and higher
|Producer prices rose more than expected in June, another factor pointing to inflation. This jump was the largest annual increase in 6-1/2 years.|
|Although trade war concerns have escalated, there’s not a lot of fear that this will hurt the economy. In the meantime, mortgage rates have remained stable.|
|Homeowners have an estimated $5.8 trillion in accessible equity, the highest ever recorded. Despite this, fewer owners are taking cash out than in previous
|Inventory remains tight, but could loosen up a bit in the near future. Inventory increased 12.2% in the 2nd quarter, the biggest gain since early 2015.|
|Although refinance applications were down last week, purchase applications rose 7% for the week and were 8% higher than the same week a year ago.|
What does Jason Vorhees have for dessert on Friday the 13th?
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
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