Weekly Mortgage Rate Update-09-05-2023
Mortgage rates improved last week after several data points showed a slowing economy.
One of the most notable reports was personal income and spending that showed spending rising much higher than the pace of wages. We see this playing out also in the growth of credit card debt and personal savings dwindling. A weaker consumer base slows the economy down.
Also, last week had loads of employment data released that showed signs of slowing in hiring, but unemployment claims remain low still. The unemployment rate did rise from 3.5% to 3.8% as the participation rate of those looking for work increased. Non-Farm Payrolls has the 3-month rolling average at about 150k jobs per month after revisions, putting us back at pre- pandemic levels for job creation. JOLTS also reported a big drop in job openings. Wage increases are slowing which also confirms the job market is not as strong as it was.
If that was all that happened rates would have been much better than they ended up, but inflation stopped our improvements. Inflation is still rising with Core PCE coming in at 4.2% year over year up from 4.1% last month, inflation is moving higher not lower, this is still more than double the inflation level that they want. This will keep the Fed on the current path for now, even with the economic data showing the rate hikes are starting to impact the economy.
We had the benefit of a long holiday weekend providing a flight to safety in bonds where money parked for the weekend, but today that money goes back to work, causing rates to worsen slightly this morning to start this week off. For the week ahead we’ve got our eye on ISM non-manufacturing to see if the economic impact is starting to show up in the services sector which is 2/3 of our economy.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.999% |
6.625% |
6.625% |
6.625% |
|
APR |
7.162%* |
6.798%* |
7.634%** |
6.791%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 9-5-2023. SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE.
*APR IS BASED ON ESTIMATED FINANCE CHARGES OF $6935
**APR IS BASED ON ESTIMATED FINANCE CHARGS OF $10,969 THIS INCLUDES FHA MORTGAGE INSURANCE PREMIUM
***APR BASED ON ESTIMATED FINANCE CHARGES OF $8343
FEES INCLUDE 1% POINTS, NO Loan Origination Fee , $1095 PROCESSING AND $0 UNDERWRITING FEE
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.