30
Oct
By First Rate Financial Group
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Financial Reports

What’s Ahead For Mortgage Rates This Week – October 30, 2023

This week’s most significant data offered preliminary numbers for manufacturing and services PMI (Purchasing Managers Index). Both can serve as a forward indicator for the economy while providing insight into the current state of the cost of living for the service industry. While manufacturing met an expected rise for the end of October, services saw a contraction, falling to 46.6 from 49.3. Readings below 50.0 can be a sign of a downturn for the economy, particularly given the time of the year.

Mortgage Applications & Rates Indices
MBA Mortgage Applications Index saw a reduction of -1.0% in applications for the week, with rates once again increasing again week over week.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing a week-to-week increase by 0.11% with the current rate at 03%.
  • 30-Yr FRM rates are seeing a week-to-week increase by 0.16% with the current rate at 79%

MND Rate Index

  • 30-Yr FHA rates increased week to week with a -0.08% decrease for this week. Current rates at 32%
  • 30-Yr VA rates increased week to week with a -0.11% decrease for this week. Current rates at 33%

Personal Income & Spending

Personal income increased $77.8 billion (0.3 percent at a monthly rate) in September, according to estimates released today by the Bureau of Economic Analysis (table 2 and table 3). Disposable personal income (DPI), which is personal income less personal current taxes, increased $56.1 billion (0.3 percent), and personal consumption expenditures (PCE) increased $138.7 billion (0.7 percent).

  • The PCE price index increased 0.4 percent.
  • Excluding food and energy, the PCE price index increased 0.3 percent.

Key point: Personal income increased in September and spending accordingly rose, moving into October. This increase in income and spending is expected moving into the Holiday season. This is a strong sign for the Advanced GDP numbers for the remainder of the year.

Job Claims
Those who applied for unemployment benefits last week fell to a nine-month low of 188,000, subverting expectations that layoffs would rise as the U.S. interest rates continued to increase.
Initial Claims were 210,000 compared to the expected claims of 210,000. The prior week was at 211,000.

What’s Ahead
This week’s scheduled economic reports include ISM manufacturing data, S&P U.S. Manufacturing PMI, and Job Openings. The stronger data points of U.S. non-farm payrolls are coming at the end of the week on Friday.

16
Oct
By First Rate Financial Group
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Financial Reports

What’s Ahead For Mortgage Rates This Week – October 16, 2023

Last week’s economic report schedule included notable reports with the CPI & Core CPI in addition to PPI and Core PPI. Many markets are keeping a close eye on the inflation numbers for the U.S. as well as many other parts of the world to help guide their policies.

Other notable reports were MBA Mortgage Applications Index and the University of Michigan Consumer Sentiment Report (Prelim.)

Consumer Price Index
With current inflation data, the Federal Reserve has hinted that they are close to ending their rate-hiking cycle for the future. This reflects a greater optimism for a soft landing in many markets.

  • Cost of goods rose 0.9% in September after a 2% gain in the prior month.
  • The cost of services rose 0.3% last month, up slightly from 0.2% in August.
  • Energy prices rose 3.3% in September, down from a 10.3% gain in the previous month.
  • Wholesale food prices have moved up 0.9% after a 0.5% fall in the previous month

Product Price Index
Over the last year, the mainline PPI is up 2.2% in September, up from 2% in the prior month. This is the highest rate since April.

  • Core PPI has had an increase of 0.3% over the previous month.
  • PPI has had an increase of 0.5% over the previous month.

Key point: This is the second month in a row that goods prices have outpaced service costs.

Mortgage Applications Increased for the Month of October
MBA Mortgage Applications Increase, a measure of mortgage loan application volume, increased 0.6% percent compared to the previous month which had seen a -6.0% reduction.

University of Michigan Consumer Sentiment Report
The University of Michigan reported that the preliminary index for Consumer Sentiment in October came in at 63, missing the consensus estimate of 67.4. The final reading of the index for September was 68.1. Expectations for the one-year inflation rate rose to 3.8% in October from 3.2% in September, marking its highest reading since May.

What’s Ahead
This week’s scheduled economic reports include readings on inflation, U.S. retail sales, and the preliminary monthly report on consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.

09
Oct
By First Rate Financial Group
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Financial Reports

What’s Ahead For Mortgage Rates This Week – October 9, 2023

The previous week offered a blend of economic updates, covering a report on the jobs market and weekly changes in mortgage rates.

The Jobs Report Was Released
This week, the monthly jobs report was released by the United States Bureau of Labor and Statistics. It showed that the job market completely exceeded all expectations, adding 336,000 jobs during the month of September. That was far higher than the expected number of 170,000. It also represents a significant increase when compared to August, where the economy added a revised total of 227,000 jobs.

The unemployment rate remained relatively steady, coming in at 3.8 percent, which is the same as August. This jobs report is important because it could play a role in whether the Fed decides to raise interest rates in November or keep them the same. With the jobs growth exceeding all expectations, it could give the Fed reason to raise interest rates, as the Fed might believe the economy is still red hot and can tolerate higher interest rates.

A Shift in Mortgage Rates and Employment Dynamics
The 30-year fixed mortgage, the most popular in the United States, continues to trend upward. This week, the average 30-year fixed climbed to 7.8 percent, up significantly from 7.55 percent last week. This is also significantly higher than the rates were in August, which averaged around 7.15 percent. Some experts are stating that a potential rate of 8 percent is not out of the question.

The 15-year fixed mortgage rate has also continued to trend upward, albeit not as much. This week, the average rate for a 15-year fixed mortgage was 7.12 percent, up from 7.05 percent last week. This is still significantly higher than the 6.5 percent average that we saw in August.

It is clear that these rising mortgage rates are putting a damper on those looking to buy a home; however, it does not appear to have caused a major drop in housing prices, although its impacts could still be yet to come.

Consumer Sentiment: A Mild Dip
Consumer sentiment appears to be holding steady, with the current numbers coming in around 68.1. This is still a bit lower than the numbers were in August when they came in at around 69.5. At the same time, the overall sentiment of the current economic conditions continues to trend downward, coming in around 71.4, compared to 75.5 in August.

Consumers are still concerned about inflation and rising interest rates, which make it harder to make ends meet. It will be interesting to see how the jobs report impacts consumer sentiment moving forward.

Looking Forward
The Producer Price Index is due to be released next week, which is another key component of inflationary data. For now, all eyes will be on the Fed’s next meeting, which takes place in early November. The Fed will decide whether to raise rates or hold them steady for another cycle.