Last week’s economic news contained few surprises. The US economic data was mixed, and demand was close to average for the Treasury auctions. Mortgage rates ended the week just a little higher, after reaching an all time record low last week.
The slow pace of global economic growth and the uncertainty in Europe support these very low mortgage rates. While the economic troubles in Europe have been well documented, and the possibility that Greece will leave the European Union continued to grow, even emerging economies such as China and Brazil are showing signs of a slowdown. Weaker economic growth reduces inflationary pressures, and uncertainty increases demand for safe assets, both of which help mortgage rates. With rates near record lows, though, the risk increases that an improving global economy or a reduction in European political uncertainty could cause rates to move higher.
The US housing sector data released last week continued the trend of improvement seen over the last several months. April Existing Home Sales rose 3% from March to an annual rate of 4.62 million units, which was very close to a two-year high. The total inventory of available existing homes for sale rose 10% to a 6.6-month supply. April New Home Sales also increased 3% from March.
The biggest economic report this week will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, Consumer Confidence will come out on Tuesday, (today). Pending Home Sales will be released on Wednesday. Revisions to first quarter GDP and Chicago PMI will come out on Thursday. The Core PCE price index, Personal Income, ISM Manufacturing, and Construction Spending will also be released on Friday. Mortgage markets were closed on Monday in observance of Memorial Day.
We hope you had a great holiday weekend.
Call today for a rate quote. Rates remain great!