Mortgage rates were slightly lower last week, declining two basis points, according to the Freddie Mac Primary Mortgage Market Survey as of August 13th. Housing affordability has improved from a year ago, and recent increases in purchase and refinance applications suggest that borrowers continue to respond to even modest changes in mortgage rates.
Mortgage applications increased 3.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 7th. “After five consecutive weeks of increases, mortgage rates declined slightly last week as oil prices dipped briefly on the hopes of a sustained resolution to the war in Iran. The 30-year fixed rate decreased four basis points but remained close to its highest level in a year,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “The reprieve in rates supported an increase in both purchase and refinance applications over the week, although the pace of applications has fallen below last year’s pace in recent weeks.
The U.S. economy saw an unexpected declined in jobs during July while the unemployment rate edged lower, the Bureau of Labor Statistics reported last Friday in a snapshot that showed a slowing employment picture. Nonfarm payrolls fell by a seasonally adjusted 23,000 for the month, compared with a downwardly revised 20,000 for June. At the same time, the unemployment rate slipped to 4.1% as the labor force participation rate fell further to 61.4%, its lowest in more than five years, another indication that fewer Americans were working or looking for jobs. “This morning’s report is a game changer in the sense that all of the recent focus has been on inflation, and this report highlights the risks that are embedded in the labor market as well,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Inflation as measured by the consumer price index rose 0.1% from June to July, the Bureau of Labor Statistics said Wednesday, showing that costs broadly remained elevated for consumers amid volatile energy prices. From a year ago, inflation dropped slightly to 3.4% from 3.5%. But in a troubling sign for consumers, it remains above the rate of wage growth, which as of last month was pacing at 3.2%, according to the BLS. Average hourly earnings slipped 0.2% from a year earlier, as well, the agency said Wednesday. Inflation has been wiping out wage gains for the past four months, Heather Long, chief economist at Navy Federal Credit Union, wrote on X. “For middle-income and lower-income Americans, this is the key issue,” Long wrote. “There will likely be some belt-tightening ahead.”
