Mortgage rates increased by six basis points last week according to the Freddie Mac Primary Mortgage Market Survey as of July 9th. This puts them right back where they were two weeks ago and leaves them in a very narrow 10-basis point band for the past eight weeks. Economic growth and housing affordability continue to improve for homebuyers as they shop for homes in today’s market.
Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 3rd. “Mortgage application volume was little changed during the week of the nation’s 250th Independence Day celebration, as the 30-year fixed rate increased slightly,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “After adjusting for the Independence Day holiday, government purchase volume increased modestly, led by a 5 percent gain in VA purchase applications, while conventional purchase activity declined. Refinance application volume was down 4 percent, as homeowners saw little enticement to act with rates still elevated.”
The Institute of Supply Management (ISM) released its latest Non-Manufacturing Purchasing Managers’ Index (PMI), revealing a slight dip in the index for the non-manufacturing sector. The actual figure reported was 54.0, indicating a continued expansion of the sector, albeit at a slightly slower pace than anticipated. Compared to the previous month’s reading of 54.5, the current figure represents a modest decline. This slight decrease suggests that while the sector is still expanding, the pace of growth has decelerated slightly. The continued expansion, albeit at a slower rate, could have implications for economic policy and market expectations.
Concern about high inflation mounted at the U.S. central bank’s meeting last month, as officials followed Federal Reserve Chairman Kevin Warsh’s lead to a more stripped-down policy statement even amid concerns that price increases were broadening and might require interest rate hikes. A “few participants” at the June 16-17 meeting said there was already a case to raise borrowing costs, even though they ultimately agreed with their colleagues to hold rates steady “at this meeting.” The broader debate, however, seemed evenly divided, minutes of the session showed on Wednesday, with “most participants” seeing a scenario in which inflation would fall towards the Fed’s 2% target on its own, but also one in which it would remain high.
