|For the Week Ending August 10, 2018|
Despite all the talk of home prices stalling, June showed an increase of 6.8% compared to a year ago according to Corelogic’s Home Price Index. This is the fastest annual pace of price increase since May of 2014. This also marks the 14th-consecutive month in which home prices remained steady or increased. This is creating a significant challenge to home affordability, especially for first time buyers.
It is common knowledge that the job market is super-hot. Employers are struggling to find qualified people to fill all of the open positions in the market. The Labor Department reported that at the end of June, there were 6.66 million job openings, which is up slightly from May’s numbers, and the third highest in history.
In a surprise turnaround, prices on the wholesale level were flat in the month of July from the prior month. Experts were expecting prices to increase by 0.2%. The core rate of inflation, which removes volatile food and energy prices, showed an increase of 0.3%. The potential slowing of inflation, if it continues, could impact the Fed’s next decision to raise interest rates.
First Time Jobless Claims:
Initial claims for the week ending August 3rd declined by 6,000 down to 213,000. The rate of claims is once again returning to near record lows. The low level of claims, combined with the high number of job openings, makes it very likely that the job market will remain robust for the foreseeable future.
Mortgage Application Activity:
The latest report from the Mortgage Bankers Association showed July applications for home purchases increased 3.6 percent from the same period in 2017. Compared to June of 2018, applications increased by 0.2 percent.
It appears as of late that more housing inventory is becoming available, which should likely lead to an increase in purchase and mortgage loan activity in the next report.
Next week’s potential market moving reports are:
• Monday August 13th – Survey of Consumer Expectations
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.
|Although last week’s jobs numbers were lower than expected, employment remains strong. Unemployment claims this week unexpectedly fell to 213,000.|
|The strong labor market and robust economy are pushing up inflation, which could pressure rates higher. Import duties are also boosting price pressures.|
|Inflation and strong labor market data have economists forecasting the Fed will raise rates twice more in 2018. Mortgage rates have already factored this
|According to NAR, the median price for a single-family home nationwide is at a record $296,000. That’s an increase of 5.3% year-over-year.|
|Weekly mortgage application numbers were down 3% from the previous week. The drop is being blamed on tight inventory and rising home prices.|
|CoreLogic’s Home Price Index shows home prices rose by 0.7% in June over May. CoreLogic forecasts prices will increase 5.1% in the year going forward.|
A committee is a group of people who individually can do nothing, but as a group decide that nothing can be done.
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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