- Mortgage rates decreased nine basis points last week, according to the Freddie Mac Primary Mortgage Market Survey released August 7th. This is the lowest that the 30-year fixed-rate mortgage has been since mid-April and is down 23 basis points from its recent highs at the end of May. The decline in mortgage rates increases prospective homebuyers purchasing power.
- Mortgage applications increased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 1st. “Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening U.S. economy. As a result, the 30-year fixed rate decreased for the third straight week” said Joel Kan, MBA’s Vice President, and Deputy Chief Economist. “Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week. Purchase activity continued to lead 2024’s pace, as increasing for-sale inventory of homes has been supporting homebuying, but on the other hand, recent weakness in the economic environment has deterred some prospective homebuyers.” Added Kan, “Refinance applications increased to their strongest pace in four weeks after being on a downward trend the prior three weeks. The refinance share increased to almost 42 percent, its highest level since April.”
- U.S. job growth slowed much more than expected in July, and the data from the prior month was revised sharply lower, indicating the labor market could be showing signs of stalling. Nonfarm payrolls increased by 73,000 jobs in July, after rising by a downwardly revised 14,000 in June, the Labor Department data showed on Thursday. The unemployment rate rose to 4.2% in July from 4.1% in the previous month. According to Helen Given, Director of Trading at Monex USA, “This is what Powell was emphasizing in his press conference on Wednesday. He said on Wednesday that we were looking at holding rates steadier for longer, but that we were going to get two sets of employment data before the next Fed meeting. Investors will need to recalibrate their views on what is the ‘normal’ pace of employment growth going forward given the headwinds of lower immigration, an aging demographic, and the arrival of DOGE related layoffs.”
- Service sector activity unexpectedly flatlined in July with little change in orders and a further weakening in employment even as input costs climbed by the most in three years, underscoring the ongoing drag of uncertainty over the Trump administration’s tariff policy on businesses. The Institute for Supply Management (ISM) said on Tuesday its nonmanufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June. Economists say businesses continue to struggle to digest the aggressive tariffs President Donald Trump is imposing on goods imported from abroad. Last week Trump, ahead of a self-imposed deadline of August 1, issued a barrage of notices informing scores of trading partners of higher import taxes set to be imposed on their exports to the U.S.
