In this week’s economic review, sinking mortgage rates entice homebuyers and refinancing homeowners and the consumer credit report posts a sizable gain.
Consumer credit increased by $18.5 billion in July, though the headline increase was largely attributed to non-revolving credit. Revolving credit rose just $2.6 billion and is down from $4.8 billion in June.
Non-revolving credit, which tracks student loans and vehicle financing, jumped $15.9 billion. The increase is the largest since October 2016.
Fixed-rate mortgage rates sank to a new 2017 low for the second week in a row. As of September 7th, the average 30-year fixed-rate fell 4 basis points to 3.78 percent with an average 0.5 points, according to Freddie Mac. The 30-year fixed rate is at its lowest since early November 2016.
This week in the economy:
- Purchase applications increased by 1 percent in the week of September 1st with declining mortgage rates catching the eye of potential home buyers. The increase puts the year-over-year purchase index at plus 5 percent. The refinancing index was also enticed by low rates with the index climbing 5 percent in the week. The refinance share of mortgage activity is at its highest level (50.9 percent) since January.
- Following the aftermath of Hurricane Harvey, more than 50,000 claims from Texas caused initial jobless claims to jump 62,000 in the week of September 2, according to Bloomberg.
- The Bloomberg Consumer Comfort Index eased back in the week of September 7 after reaching an expansion high the week prior. The index fell from 52.3 to a level of 52.6.
The economic calendar for the week of September 11th, 2017:
- Tuesday – JOLTS
- Wednesday – MBA Mortgage Applications
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Consumer Price Index
- Friday – Retail Sales, Consumer Sentiment
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