Although interest rates are about 1/2% higher than this time last year, the number of people getting loans to purchase homes is up 4% from last year. The takeaway there is that higher rates are not dissuading folks from buying houses. The higher rates are dampening the refinance market, which is down 41% from last summer.
The second calculation of the second quarter GDP was announced today at a 3.0% growth rate, which is quite an improvement over the first measure at 2.6%. Speaking of studies ending in “DP”, the ADP Employment Report shows that there were 237K jobs created last month. That’s much stronger than the 185K expected. Manufacturing only accounted for 16K new jobs, construction added 18K, and the service sector (that’s what you and I do for work every day) provided an astounding 204K new positions just last month.
A hurricane in Texas and a Korean missile fired through Japanese airspace has pushed mortgage bond pricing up to highs not seen since last year’s presidential election. Fear and uncertainty over world events typically breed an environment for lower interest rates.
Case Shiller announced that their research shows a 5.8% home price appreciation this summer versus last summer (nationwide). Price growth has accelerated from 5.6% seen last month by the study.
New Home Sales slowed by 9.4% last month. Considering the rampant rate with which homes are being built, that number is sure to rise again next month.
President Trump’s threat to shut down the U.S. Government, if necessary, to build a wall along the border with Mexico is putting a damper on Stocks this morning. It doesn’t help that the President is also threatening to scrap NAFTA.
On the other side of the political spectrum, the Jackson Hole Fed Symposium kicks off on Friday with speeches from Janet Yellen and Mario Draghi.
Just like that, school is back in session. It was a great summer vacation! Our family did a lot of fun things and I enjoyed sleeping in on a regular basis, staying up late, and relaxing a lot more. But now it’s time to get back on a schedule. It’s also time to pay the credit card bill for all the back-to-school shopping that was required to get four boys outfitted for learning. As a nation, our back-to-school spending will hit $83.6 billion this year, a marked increase from last year’s $75.8 billion in clothes, shoes, pencils, and paper.
Mortgage bonds are trading sideways, keeping interest rates steady.
Consumer Inflation reported today shows prices to retail customers are up 1.7% over this time last year, just a tick less that expectations. Two items that pulled the number up from flat-line were out-of-pocket medical expenses, rising 2.6%, and rent, which rose 4.0% from last summer. If you know someone who is renting, do them a favor & tell them that interest rates are less than their last rent increase.
Have a terrific weekend!