What’s Ahead For Mortgage Rates This Week – September 11, 2023

What's Ahead For Mortgage Rates This Week -  September 11, 2023Last week’s scheduled economic reporting was limited due to the U.S. Labor Day holiday on Monday. The Federal Reserve released its Beige Book report and weekly readings on mortgage rates and jobless claims were also published.

Federal Reserve Releases Beige Book Report

The Beige Book report is a summary of information supplied to Federal Reserve policymakers by their business and professional contacts. Highlights of September’s Beige Book report included:

  • Accelerated leisure spending by consumers boosted economic growth during July and August.
  • Non-essential retail sales slowed, but the economy was boosted by a final stage of post-COVID-19 pent-up demand.
  • Prices for consumer goods fell faster than in many other sectors.
  • Auto sales rose due to better inventories available to consumers but increased sales were not connected with rising consumer demand for vehicles.
  • Rising business costs reduced profit margins.

The Beige Book report is published eight times a year before scheduled meetings of the Federal Reserve’s Federal Open Market Committee.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week; rates for 30-year fixed-rate mortgages averaged 7.12 percent and were six basis points lower than in the previous week. Rates for 15-year fixed-rate mortgages were three basis points lower and averaged 6.52 percent.

Initial jobless claims were lower with 216,000 first-time claims filed as compared to the prior week’s reading of 229,000 initial jobless claims filed. Analysts expected a reading of 230,000 new jobless claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on inflation, U.S. retail sales, and the preliminary monthly report on consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.

What You Need to Know About Mortgage Rates This Week – August 28, 2023

Property interest rate,finance loan increase.investor planning.business real estate.profit of banking.businessman thinking strategy analysisUnderstanding the dynamics of mortgage rates is crucial in assessing the affordability of a home. These rates aren’t isolated figures; they pivot on a variety of economic and market stimuli, and they can exhibit volatility from one week to another. Let’s delve into the current scenario of mortgage rates and what it signifies for potential and existing homeowners:

  • Current data indicates that while mortgage rates are elevated, there’s potential for stabilization or a dip later this year if inflation undergoes moderation.1.
  • As of August 25, a 30-year fixed mortgage stood at 7.57%. This is a marginal reduction from the prior week, yet it hovers close to a 22-year peak.2 3.
  • To regulate inflation, the Federal Reserve heightened its primary interest rate by 0.25% in July. A similar action might be on the horizon for September.4.
  • The median value of an existing house in July escalated to $410,200, marking it as the second most elevated record ever. This price indicates an 8.5% increase from the last quarter.
  • In July, sales of existing homes dipped by 3.3%. This slump was ubiquitous across all major U.S regions when juxtaposed with sales data from the previous year.1.
  • The present housing market exudes an aura of competition and tightness, courtesy of the high demand and insufficient supply dynamics.

Decoding the Mortgage Situation: Questions Homeowners Should Ask
How these trends impact you is contingent on your specific objectives and situation. Consider the following:

  • Duration of Stay: Are you eyeing your home as a prolonged investment? Locking in a fixed-rate mortgage might be judicious as dramatic rate reductions seem improbable soon. Conversely, those seeking short-term flexibility might find adjustable-rate mortgages appealing, though one should brace for potential hikes in rates.
  • Monthly Payment Affordability: Elevated mortgage rates translate to steeper monthly outflows. It’s essential to reevaluate your financial strategy or explore homes that don’t strain your finances.
  • Equity Positioning: When considering refinancing, substantial equity can pave the way for qualifying at a competitive rate and trimming closing expenses. This equity can also be leveraged for cash withdrawals to serve diverse needs, including home enhancements or consolidating debt.
  • Credit Metrics: Your credit rating and the ratio of your debt to income are pivotal in securing a mortgage at an attractive rate. Superior credit scores and minimized debt ratios amplify the prospects of a beneficial contract. Regularly monitor your credit score, and if required, embark on enhancement strategies.

In Conclusion

Despite the current elevated mortgage rates in comparison to past norms, this scenario may not be perpetual. For those contemplating buying or refinancing, acting promptly might be judicious before any further rate surge. However, it’s paramount to undertake thorough research and solicit multiple lender proposals to secure a mortgage tailored to your fiscal requirements and goals.

Sources:

1Current Mortgage Rates: August 28, 2023 | Rates Stabilize

2Current Mortgage Rates for Aug. 25, 2023: An Important Rate Eases

4Mortgage Rate Forecast August 2023 | Bankrate

3Mortgage Rates Surge to a 22-Year High, but We See a ‘Glimmer of Optimism’ Ahead

Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? – Forbes

What’s Ahead For Mortgage Rates This Week – August 14, 2023

What's Ahead For Mortgage Rates This Week - August 14, 2023Last week’s economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Holds Steady in July

Month-to-month inflation rose at a pace of 0.20 percent in July and met analysts’ expectations. There was no change in the pace of month-to-month inflation from June’s reading of 0.20 percent growth. The Consumer Price Index also reported that year-over-year inflation reached 9.10 percent, which was the highest reading since reaching a 40-year high in mid-2022.

Core inflation, which excludes volatile food and fuel prices, was unchanged from June’s month-to-month pace of 0.20 percent growth. July’s month-to-month reading matched analysts’ expectations. Year-over-year core inflation dipped slightly to 4.70 percent in July as compared to June’s reading of 4.80 percent year-over-year inflation.

Federal Reserve leaders said that they would continue monitoring domestic and global economic developments along with financial and economic data before determining whether or not to raise the Fed’s key interest rate range.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates for the third consecutive week. The average rate for a 30-year fixed-rate mortgage approached seven percent and rose by six basis points to 6.96 percent. Rates for 15-year fixed-rate mortgages rose by nine basis points to 6.34 percent.

248,000 initial jobless claims were filed last week, which surpassed expectations of 231,000 new claims filed and the previous week’s reading of 227,000 first-tine jobless claims filed.

University of Michigan Consumer Sentiment Survey

In other news, the University of Michigan released its monthly preliminary reading on U.S. consumer sentiment.

Consumer sentiment rose to an index reading of 72.0 in August as compared to the July reading of 71.6.  The majority of.consumers surveyed indicated that the economy improved in the three months leading up to the survey., Component readings included consumer sentiment index readings for current economic conditions and economic conditions within the next six months. The survey reading for consumer sentiment about economic conditions over the next six months fell to an index reading of  67.3 from the July reading of 68.3 Readings over 50 indicate that most consumers are confident about current economic conditions.

Joanne Hsu, the University of Michigan’s director of consumer surveys, said: “…In general, consumers perceived few differences in the economic environment from last month, but they saw substantial improvement relative to just three months ago.”

What’s Ahead

This week’s scheduled economic reporting includes reading on housing starts and building permits issued, the minutes of the Federal Reserve’s recent meeting of its Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims.