Weekly Economic Review: Uncertainty Overseas Favorable for Mortgage Rates

Posted by Laine Smith on 7/14/15 1:00 PM

Topics: Economy

Last week, U.S. financial markets were primarily influenced by events in China and Greece. Uncertainty about Greece's debt crisis and concerns about slower growth in China were favorable for US mortgage rates, which ended the week a little lower.

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The JOLTS report showed job openings are up and employers are retaining employees. Job openings increased 0.5 percent in May to a record 5.363 million. The hiring rate did dip to 3.5 percent, possibly reflecting the difficulty of employers finding qualified employees.

Minutes of the June FOMC meeting were released last week with little surprise. While some policymakers saw conditions falling in line with a rate hike, others noted financial instability. According to the meeting minutes, the majority  of members wanted to see greater improvement in employment and upward pressure on inflation. Members also cited risk in Greece and China as influential factors in their rate hike decision, risk that has grown since their June meeting.

Last week in the economy:

  • Mortgage rates (the national average) were flat.
  • The purchase index of MBA Mortgage Applications increased 7 percent, with the refinance index up 3 percent.
  • Initial Jobless Claims were up 15,000 to 297,000 though the shortened July 4 week can produce volatile readings in subsequent weeks.
  • Consumer Credit data showed consumer borrowing increased $16.1 billion in May following a revised $21.4 billion in April.
  • The Consumer Confidence index eased back 0.5 points in the July 5 week, though readings have been strong this year. This data reflects confidence in the employment market and income outlook.

What's on the economic calendar for the week of July 13, 2015:

Tuesday: Retail Sales will be released.
Wednesday: MBA Mortgage Applications will be updated.
Thursday: Jobless Claims and Housing Market Index will be released.
Friday: Housing Starts, Consumer Price Index and Consumer Sentiment will be released.
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