Market News 7-12-19
Mortgage Market Update
Recent comments by Fed Chair Jerome Powell have markets speculating a 0.25% policy rate cut at this month’s FOMC meeting. Some traders think it may even be 0.50%. Although the Fed doesn’t set mortgage rates, expectations of a Fed rate cut help keep rates low. Weak inflation data this week also could help keep rates low. Sustained labor market strength could pressure rates higher by supporting an otherwise slowing economy. Jobless claims last week fell to a 3-month low.
Mortgage applications were down 2.4% last week, although purchase applications were up 2.0% for the week and are 5.5% higher year-over-year. Home prices are increasing, and buyers aren’t shying away from supersized mortgages. Jumbo mortgages rose for the 6th straight month in June. Total housing inventory at the end of May rose to 1.92 million, up 2.7% from a year ago. Unsold inventory was at a 4.3-month supply at the current sales pace.