Mortgage rates increased this week in response to Wednesday's Federal Reserve meeting statement. Though the Fed kept their policy unchanged due to lack of job growth and below-target inflation, a December rate hike is not off the table.
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In the statement, the Fed said that although the pace of job gains has slowed, the housing sector, household spending and unemployment has held steady, and the current 0-0.25% target range for the federal funds rate is still appropriate. The FOMC will assess progress toward its objectives of employment and inflation at their next meeting in December.
New home sales fell to annual rate of 468,000 in September, which is nearly 70,000 below Econoday's low-end estimate and the lowest point since November 2014. The drop in sales led to an increase in supply, up to 5.8 months from 4.9 months in August. A 6-month supply signals a healthy balance between supply and demand.
Last week in the economy:
- Mortgage rates (the national average) increased 0.05% (5 basis points).
- The purchase sector of MBA Mortgage Applications slipped 3 percent in the October 23 week, following several volatile weeks. Refinance applications were down 4 percent.
- Consumer Confidence fell to 97.6, a 5.4-point drop, with consumers saying there are fewer jobs available now than in September.
- Initial Jobless Claims increased minimally in the October 24 week to a lower-than-expected 260,000, just off a 42-year low.
- Real GDP came in at an annualized rate 1.5 percent, just below expectations. Steady domestic spending helped prop GDP growth for the third quarter.
What's on the economic calendar for the week of November 2, 2015:
- Wednesday: MBA Mortgage Applications
- Thursday: Jobless Claims
- Friday: Employment Situation
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