After a drop in mortgage rates last week following the Fed's post-meeting statement, mortgage rates saw a slight uptick after Fed Chair Janet Yellen's press conference on Thursday. Other economic data was mixed this week and had little affect on mortgage rates.
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Yellen gave her first speech since the September 17 Fed meeting on Thursday night, clarifying uncertainties of rate hike timing. Yellen stated that although the Fed was not ready to raise interest rates at their last meeting, they are not planning to wait much longer. She expects a federal funds rate hike to be appropriate before this year's end.
The FOMC next meets October 27 and 28.
Though there was a slowdown in sales of August existing homes, sales are still healthy and trending higher year-over-year by 6.2 percent. Existing home sales for August came in at a lower-than-expected amount of 5.31 million. July's existing home sales were revised down to 5.58 million, which is still stands as an 8-year high.
The year-over-year median price for existing homes is up 4.7 percent to $228,700, which is the lowest median price since August 2014. The FHFA House Price Index reported cooling home prices late in the second quarter, but a July pick-up allowed the FHFA home price index to increase 0.6 percent with a year-over-year increase of 5.8 percent.
New home sales data is often volatile month-to-month. The August report showed a new annual rate of 552,000, far above high-end estimates and the highest rate since February 2008. The August report shows a 22 percent year-over-year gain.
Last week in the economy:
- Mortgage rates (the national average) increased 0.03% (3 basis points).
- The purchase index of MBA Mortgage Application surged 9% with the refinance index jumping 18%. This was most likely due to rate declines after last week's FOMC post-meeting statement.
- Initial Jobless Claims are continuing to hold at record lows. Initial claims for the September 19 week came in at a lower-than-expected 267,000.
- GDP increased to a 3.9% annual rate after a strong second quarter of personal spending.
What's on the economic calendar for the week of September 28, 2015:
Monday: Pending Home Sales
Tuesday: Consumer Confidence
Wednesday: MBA Mortgage Applications and ADP Employment Report
Thursday: Jobless Claims
Friday: Employment Situation
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