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FIRST TEAM’S WEEKLY MORTGAGE WATCH (July 9th, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:
- Mortgage rates marched upward last week, as solid economic news added to the expectation of future removal of accommodative monetary policy around the globe.
- Domestically, both the ISM indices notched solid increases into the mid-50s, indicating moderate growth in both manufacturing and services.
- Friday’s employment report sported a 222K increase in new jobs, well above expectations. However, the minutes of the most recent Federal Reserve meeting did show some desire to remain very cautious in both raising interest rates and in the trimming of its huge balance sheet.
- While it is easy to get excited by the prospect of the economy finally picking up some “real” steam, it is worth remembering that this slow recovery has featured historically low mortgage rates.
- The beginning of this week may see rates wobbling about, as traders and analysts digest the recent news and data.
- However, on Friday, a number of very important economic reports are due. If they reinforce improving economic conditions, then mortgage rate will likely continue to trend upward.
One More Squeeze on Housing Inventory
Overall housing inventory remains tight, and with new homes, it may get even tighter in the coming days. A new survey revealed that about two-thirds of homebuilders are struggling to complete projects because of labor shortages. Over one-third have turned down projects because they don’t have the people. With construction spending almost 6% higher than last year, continued labor shortages will add to tight inventories and continued home price appreciation.