After a highly anticipated meeting, the FOMC has decided against a September federal funds rate hike. The news was good for mortgage rates, which ended the week lower.
Image courtesy of cooldesign at FreeDigitalPhotos.net
While investors remained split about whether or not the first rate hike since 2006 was warranted in September, Fed Chair Janet Yellen stressed that inflation still remains "quite low" and "way below target".
Though inflation is not near the 2% target level, Yellen remained upbeat about the economy in her press conference, pointing to the strength of the labor market and lows of unemployment readings.
The Housing Market Index is up another point in September. Recent readings of this report have been at 10-year highs. One of the weakest components, market traffic, was up 2 points to 47 and suggests that climbing rental rates are pushing first-time homebuyers into the market.
Housing starts fell in August but permits increased, showing promise for starts in the coming months. Starts were down 3% while permits increased 3.5% in August.
Last week in the economy:
- Mortgage rates (the national average) fell 0.05% (5 basis points).
- The purchase index of MBA Mortgage Applications fell 4% over the Labor Day week while the refinance index, which has been fluctuating wildly over the last severl weeks, fell 9 percent.
- Retail sales showed solid growth for the second month in a row. August retail sales increased by 0.2%.
- Initial Jobless Claims fell 11,000 in the Labor Day week to 264,000, one of the very lowest levels of the last 40 years.
- The Consumer Price Index fell 0.1% in August with a year-over-year rate of only +0.2 percent. The core CPI, which excludes energy and food, increased by only 0.1% with the year-over-year rate holding steady at +1.8 percent.
What's on the economic calendar for the week of September 21, 2015:
Monday: Existing Home Sales
Tuesday: FHFA House Price Index
Wednesday: MBA Mortgage Applications
Thursday: Jobless Claims & New Home Sales
Friday: Consumer Sentiment
To receive more economic and housing market news, subscribe to our weekly economic e-mail update: