- Mortgage rates declined two basis points last week, according to the Freddie Mac Primary Mortgage Market Survey released August 28th. Mortgage rates are at a 10-month low. Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market.
- Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 22nd. “Mortgage rates inched higher for the second straight week. While this was not a significant increase, it was enough to cause a pullback in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications had their strongest week in over a month, up 2 percent, and the average loan size increased to its highest level in two months at $433,400. Prospective buyers appear to be less sensitive to rates at these levels and are more active, bolstered by more inventory and cooling home-price growth in many parts of the country.”
- Federal Reserve Chair Jerome Powell on Friday opened the door ever so slightly to lowering a key interest rate in the coming months but gave no hint on the timing of a move and suggested the central bank will proceed cautiously as it continues to evaluate the impact of tariffs and other policies on the economy. Powell said that there are risks of both rising unemployment and stubbornly higher inflation. Yet he suggested that with hiring sluggish, the job market could weaken further. “The shifting balance of risks may warrant adjusting our policy stance,” he said, a reference to his concerns about weaker job gains and a more direct sign that the Fed is considering a rate cut than he has made in previous comments. Still, Powell’s remarks suggest the Fed will proceed carefully in the coming months and will make its rate decisions based on how inflation and unemployment evolve.
- The U.S. economy grew at a pace that was faster than expected in the second quarter as consumers and businesses held up against tariff volatility. Gross domestic product rose at a 3.3% annualized pace in the April-through-June period, the Commerce Department reported Thursday in its second estimate for the most encompassing measure of economic activity. The reading was better than an initial 3.0% estimate as well as the 3.1% Dow Jones consensus forecast. Consumer spending, which rose by 1.6% compared with an initial 1.4% estimate, helped push the number higher. More importantly, a measure called final sales to private domestic purchasers jumped 1.9%, up from the previous figure of 1.2%. Federal Reserve officials watch that metric closely as an indication of demand and sales that focuses on activity within U.S. borders, an especially important measure considering the uncertain impact of President Donald Trump’s tariffs.
