Mortgage rates increased by four basis points last week according to the Freddie Mac Primary Mortgage Market Survey as of June 11th. Stronger employment momentum has helped existing home sales reach a five-month high. Importantly, homebuyers are looking past the short-term rate fluctuations and actively entering the market, signaling renewed confidence in homeownership opportunities.
Mortgage applications increased 10.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 5th. “Mortgage rates were volatile last week as news from the Middle East continues to drive markets,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “While the average rate was up slightly, there were opportunities where borrowers were seeing somewhat lower rates. Both refinance and purchase applications rebounded coming out of the Memorial Day holiday week, with refinance applications up 15 percent and purchase applications up 7 percent.”
Job growth unexpectedly surged in May as the U.S. labor market continued a solid year of expansion, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls jumped to a seasonally adjusted 172,000 for the period, down slightly from the upwardly revised 179,000 in April and far above the Dow Jones consensus estimate for 80,000. The unemployment rate held steady at 4.3%, as expected. Breadth of job gains improved in May, with multiple sectors seeing solid advances. “This is a labor market that is stronger than it was last year and is looking pretty darn solid, despite high energy prices and higher inflation generally,” said Gus Faucher, chief economist at PNC. “There’s no indication that the labor market needs support.”
Inflation accelerated in May as rising energy costs contributed to pain for consumers, though underlying pressures were less intense. The consumer price index, a broad gauge of goods and services costs across the U.S. economy, rose at a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 4.2%, the Bureau of Labor Statistics reported Wednesday. Americans are getting squeezed financially by inflation that’s back at a 3-year high,” said Heather Long, chief economist at Navy Federal Credit Union. “The frustration for many Americans is that so many of the basics are up in price right now; gas, food, electricity, and medical care are all clear pain points that are above 3% inflation. Ending the war in Iran will help to moderate inflation, but the worst is likely still to come for rising food prices.”
