- Mortgage rates decreased another five basis points last week, according to the Freddie Mac Primary Mortgage Market Survey released August 14th. This is the lowest that the 30 year fixed-rate mortgage has been since October 2024. Furthermore, rates are down 31 basis points from recent highs at the end of May and down a total of 46 points from this past January when rates briefly went over the 7% threshold. Purchase application activity is improving as borrowers take advantage of this decline in mortgage rates.
- Mortgage applications increased 10.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 8th. “The 30-year fixed mortgage rate declined last week, which spurred the strongest week for refinance activity since April. Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinances accounted for 46.5 percent of applications and as seen in other recent refinance bursts, the average loan size grew significantly to $366,400”. Added Kan, “Given the relative attractiveness of ARM rates compared to fixed rate loans, ARM applications increased 25 percent to their highest level since 2022, and the ARM share of all applications was almost 10 percent.”
- The consumer price index increased a seasonally adjusted 0.2% for the month and 2.7% on a 12-month basis, the Bureau of Labor Statistics reported Tuesday. Excluding food and energy, the core CPI increased 0.3% for the month and 3.1% from a year ago. Following the report, traders ramped up bets that the Federal Reserve would start reducing rates again in September. Tariffs did appear to show up in several categories, but other areas that normally would be hit by import duties showed little reaction. “Inflation is on the rise, but it didn’t increase as much as some people feared,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “In the short term, markets will likely embrace these numbers because they should allow the Fed to focus on labor-market weakness and keep a September rate cut on the table. Longer term, we likely haven’t seen the end of rising prices as tariffs continue to work their way through the economy.”
- Fewer Americans made initial filings for jobless benefits last week, the Labor Department said Thursday. The number of people seeking unemployment benefits fell to 224,000 the week of August 9th, down from 227,000 a week earlier. Analysts polled by The Wall Street Journal had expected to see 229,000 new jobless claims. The number of continuing claims, a gauge of the size of the unemployed population, fell to 1.95 million in the week through Aug. 2, compared with 1.97 million a week earlier. Though job creation in the economy has slowed, the absence of a big uptick in the weekly claims figures continues to suggest that the labor market is avoiding a sizeable increase in layoffs.
