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Economic News
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Kenton Becker
Loan Officer
Office: (206) 423-2552
NMLS #123961 ,
Washington #MLO-123961

Events Last Week:

Retail Sales Rose
Housing Starts Up
Jobless Claims Fell
Manufacturing Mixed

Events This Week:

Wed 8/21
Fed Minutes
Existing Sales

Thur 8/22
Jobless Claims
Leading Indicators

Fri 8/23
New Home Sales

 

 

 

landhome landhome
landhome

Taper Talk Hurts Mortgage Rates

Last week, a broader consensus formed that the Fed will begin to taper its bond purchase program in September or October, and investors reacted by selling US stocks and bonds. The US economic data released last week provided little reason for the Fed to wait, and the European data showed unexpected strength. As a result, mortgage rates ended the week higher.

The Fed's massive bond purchase program powered stocks to record highs and helped push mortgage rates to historic lows. The Fed has indicated that it is almost time to begin to scale back the program, and the only reason to wait would be unexpected weakness in economic growth. Last week's labor market and Retail Sales data was stronger than expected, though, causing more investors to anticipate that the Fed will taper in the next month or two. Both stocks and bonds were negatively affected by the growing expectations.

Mortgage rates received additional upward pressure from the economic news out of Europe. After eighteen months in a recession, second quarter GDP in the euro zone increased modestly, exceeding the consensus. In particular, Germany and France performed well. The recovery in Europe caused global interest rates to rise last week, including US mortgage rates.

Also Notable:
  • July Housing Starts rose 6% from June
  • Home Builder confidence rose to the highest level in eight years
  • Core CPI inflation was 1.7% higher than one year ago
  • Jobless Claims declined to the lowest level since October 2007

graph

 
Average 30 yr fixed rate:
Last week: +0.03%
This week: +0.20%
Stocks (weekly):
Dow: 15,125 -250
NASDAQ: 3,610 -40
 

This Week

The most highly anticipated economic release this week will take place on Wednesday when the FOMC Minutes from the July 31 Fed meeting are revealed. These detailed Minutes provide additional insight into the debate between Fed officials. The biggest economic data will be Existing Home Sales on Wednesday and New Home Sales on Friday. The only other report will be Leading Indicators on Thursday. Investors also will be eager to hear comments from Fed officials.

©2013 MBSQuoteline

landhome
Equal Housing Opportunity Lender. Rates, Program, Fees, and Guidelines are subject to change without notice. Not a commitment to lend. Land Home only conducts business in states we are approved to. Land Home Financial Services, 22525 SE 64th Place, Suite 220, Issaquah, WA 98027. Washington Consumer Loan License #CL-89331. NMLS ID # 89331. Kenton Becker Licenses: NMLS #123961; Washington #MLO-123961. You are receiving this communication because of an existing and/or past business relationship, or because you have consented to receive communications from Land Home. 08-19-13  

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