Rates Up as Fed Expected to Begin Tapering in September
Mortgage interest rates increased this past week as markets expect the Fed to begin tapering Treasury and Mortgage Bond purchases in September. Economic data, though, was mixed. Economic data stronger than expected included July Retail Sales, weekly jobless claims, the August NAHB Housing Market Index, Q2 Productivity, and Q2 Unit Labor Costs. Weekly jobless claims fell to its lowest level since October of 2007 and the NAHB Housing Market Index reached its best level in 11 years. Economic data weaker than expected included June Business Inventories, the August New York Empire State Manufacturing Index, July Industrial Production, July Capacity Utilization, the August Philadelphia Fed Business Index, and the University of Michigan Consumer Sentiment Index. Inflation data was also tame. The Producer Price Index is up just 2.1% year over year and the Consumer Price Index is up just 2.0% year over year. In Europe, the Euro zone economy emerged from recession and expanded by 0.3% during the second quarter. Investor confidence in Germany increased more than expected.
Wall Street Commentary
The Dow Jones Industrial Average is currently at 15,133, down almost 300 points on the week. The crude oil spot price is currently at $107.74 per barrel, up almost $2 per barrel on the week. The Dollar strengthened versus the Euro and Yen on the week.
Next week look toward Wednesday’s Existing Home Sales and FOMC Minutes, Thursday’s Jobless Claims, and Friday’s New Home Sales as potential market moving events.
Currently, a Conventional 30 year fixed rate is hovering in the range of 4.625% to 4.75 % with no points.
** Mortgage rates are subject to daily market fluctuations and can change without notice. Mortgage rates are also effected by down payment, occupancy, loan amount, credit score, lock period and property type.