Mortgage Rates Weekly Update for August 13, 2018

Mortgage Rates Update for August 13, 2018 by John R. Thomas with Primary Residential Mortgage, Inc. in Newark, Delaware. Get advice on Locking or Floating your Mortgage Rate to start the week as well as the latest housing and finance news updates. John Thomas is the Branch Manager, a Delaware Loan Officer and the author of the best selling book, Your Guide to Buying Your First Home in Delaware. Call 302-703-0727 for a Rate Quote or Apply Online for Rate Quote

Mortgage Rates were able to move lower last week as mortgage bonds were able to rally higher as stock market sold off.  If you look at the mortgage bond chart below you can see mortgage bonds hit a low on August 1st and have rallied higher since but have not been able to break above the 100 day and 50 day moving averages which are very strong overhead resistance.  Bonds have benefited from a sell off in the Stock Market because of weak world currencies against the US dollar.  We are recommending LOCKING your mortgage rate to the week as it will be very hard mortgage rates to move much lower from here with very strong resistance for bonds at the 100 day moving average.

In Economic News

US Stock Market moved lower on Friday which boosted mortgage bonds because of the political concerns in Turkey, which is sending their currency plunging 12% since Thursday.  The concern is that other world currencies could have the same issues as Turkey so investors were moving money from stocks to bonds which helped mortgage rates.  The biggest concern is could Turkey become the next Greece.

Producer Price Index for July 2018  was unchanged from June 2018 and the year over year PPI dropped from 3.4% to 3.3%.  PPI measures inflation at the wholesale level which is not always directly passed on to consumers.

Consumer Price Index for July 2018 rose 0.2 percent from June 2018 and the year over year reading remained at 2.9%.  The CPI measures inflation at the consumer level and higher inflation is the enemy of mortgage bonds and typically will move interest rates higher.  The CPI reading of 2.9% is the fastest pace of inflation in almost 7 years.  We could see start to see inflation rise as more tariffs kick in.  Mortgage rates should have moved up in response on Friday but did the exact opposite because of the turmoil in Turkey.

Weekly Initial Jobless Claims were released on Thursday and showed a decrease of 6,000 claims to 213,000 claims for the week.  The previous week’s claims were revised higher by 1,000 claims to 219,000.  Weekly initial jobless claims remain at historically low levels and continue to show a very strong labor market in the United States which is also supported by historically low unemployment rate of 3.9%.  If this continues, it will only be a matter of time before wage pressure inflation starts to show up.

The Week Ahead in Mortgage Rates

For the Week of August 13, 2018 thru August 17, 2018

Retail Sales for July 2018

NAHB Housing Market Index, Housing Starts & Building Permits for July 2018

Weekly initial jobless claims on Thursday

Consumer Sentiment Index on Friday

In Housing News

CoreLogic Home Price Index for June 2018 showed that home prices rose 0.7% from May 2018 and are up 6.8% year over year from June 2017.  The 6.8% is weaker than the 7.1% year over year we saw in May, BUT these levels are still EXTREMELY strong and meaningful.  CoreLogic fore casted that homes will appreciate 5.1% in the year going forward from June 2018 to June 2019.  Within the CoreLogic report, it was reported that 1/3 of Millennial renters feel they can’t afford the down payment to purchase a home.  This means there is a big gap in education as there are low down payment loans available such FHA Loans with 3.5%, VA Loans and USDA Loans with 0%, and Conventional loans with as little as 3%. There are also down payment assistance programs in every state of the US.

First Time Home Buyer Seminars Coming Up:

Delaware First Time Home Buyer Seminar is Saturday August 18, 2018 in Newark, Delaware.

Delaware First Time Home Buyer Seminar is Wednesday August 22, 2018 in Wilmington, Delaware.

Register by calling 302-703-0727 or Register online at http://www.DelawareHomeBuyerSeminar.com

DE Mortgage Rates remain near all time record low rates but having been moving higher as of late, so it is the perfect time to purchase or refinance a home before interest rates move even higher. Call 302-703-0727 for a free mortgage consultation with a licensed mortgage loan officer that can review your options with you or APPLY ONLINE

Mortgage Rates Weekly Update

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