Here is this week’s update on the mortgage industry from my friend Mary Frances Ahlquist at Sulquist Mortgage:
- For the first time in a month, the Freddie Mac Primary Mortgage Market Survey reported a drop in the 30-year fixed rate, down 13 basis points. Mortgage rates continue to hover around new levels, as the dynamics of a once-hot housing market have faded considerably. Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint. Yesterday’s interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market, according to Freddie.
- Just under expectations, unemployment claims for the week ending Oct. 29 fell by 1,000 to 217,000 from 218,000 the previous week, the Labor Department reported. Continuing claims, which run a week behind the headline number, increased 47,000 to 1.485 million. The U.S. job market remains resilient in the face of rising interest rates (6 hikes by the Fed this year) and persistent inflation. All eyes will now turn to the Labor Department’s October jobs report Friday, the last peek at the state of the economy ahead of the midterm elections.
- In September, the overall trade deficit widened to $73.3 billion, up from a revised $65.7 billion figure in August, Commerce Department data showed. Exports dipped to $258 billion and imports rose to $331.3 billion. High interest rates have strengthened the US Dollar, making American goods relatively more expensive, which in turn weighed on exports. “While the stronger dollar has helped both to temper the cost pressures created by rising global food and energy prices and to narrow the nominal trade deficit, it is almost certain to contribute to weaker net exports over the coming year,” said Mark Hopkins, senior economist at Moody’s Analytics.
- Pending home sales trailed off for the fourth consecutive month in September, according to the National Association of Realtors, down 10.2% from August. Economists had predicted a 4% decline. Sales were down 31% year over year. For potential buyers, the increase in rates means the monthly payment on a median-priced home, with a 20% down payment, is now close to $1,000 higher than it was in January. George Ratiu, senior economist at Realtor.com, noted that with wages falling behind due to inflation, some buyers’ purchasing power has been reduced by over $100,000.
Mary Frances Ahlquist
NMLS 157324 | CO LMB 100020496
701 Granite Street, Suite 220, Frisco CO 80443