Mortgage rates increased last week as a result of rising yields in the global bond markets and weaker-than-expected gains in US economic data.
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Initial Jobless Claims decreased significantly the week of April 25 to the lowest level since April 2000. The 4-week average is down 1,250, signaling solid improvement for the April Employment report to be released on Friday.
The Fed met on Tuesday and their statement contained no surprises - going forward, they will decide at each meeting whether to raise the federal funds rate. Economic growth slowed during winter, so the timing of the first rate hike is dependent on how quickly the economy rebounds in the coming months.
A combination of factors, including poor winter weather, lower energy prices and a stronger dollar, resulted in weak first quarter figures. Gross Domestic Product (GDP) increased just 0.2% for the first quarter of 2015, down from 2.2% in 2014's fourth quarter.
Last week in the economy:
- The S&P 500 started the week at 2,102, dropping 1.14% and ended the week at 2,081.
- Mortgage rates (the national average) increased 0.15% (15 basis points).
- The purchase index of MBA Mortgage Applications remained unchanged after increases 4 weeks out of the last 5. The refinance index was down 4% in the week of April 24 though rates remain low.
- Consumer Confidence fell 6 points to a lower-than-expected score of 95.2.
- Pending Home Sales were up a 3rd straight month, 1.1% higher than consensus.
- Initial Jobless Claims plunged 34,000 in the week of April 25 to 262,000.
What's on the economic calendar for the week of May 4, 2015:
Wednesday: MBA Mortgage Applications will be updated.
Thursday: Jobless Claims, Consumer Credit, Fed Balance Sheet and Money Supply data will be released.
Friday: April's Employment Situation statistics will be updated.
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