Even as the economy continues to improve, it’s lost some of its momentum over the past couple of months as the latest wave of COVID cases has been a drag on employment, consumer spending and consumer confidence. On the positive side, mortgage rates have remained steady offering homebuyers and those still wanting to refinance added time to take advantage of the favorable rate environment.
This week we’ve already seen some more important inflation data come out. The latest report on consumer inflation reported that consumer prices for August rose 0.3 percent from July and were up 5.3 percent compared to August 2020, close to expectations. However, core CPI – excluding food and energy – rose a small 0.1 percent from the prior month and was 4.0 percent higher than a year ago, below most forecasts. The tamer than expected inflation figures suggested less pressure on the Federal Reserve to scale back its stimulative bond buying program.
And speaking of the Fed’s bond-buying program, the latest sentiment is that we won’t see any tapering at least until we get another good jobs report. This is important because their program is helping mortgage rates stay low, and when they do decide to change their policy and reduce their bond-buying, it’s likely to cause some volatility in rates at least and worsening trend at most.
As for the rest of this week, the only other important economic report I’m waiting to see is the latest look at Retail Sales, which is not expected to be an encouraging report. After a weak July that showed broad declines, consensus for August is a 0.8 percent fall in overall retail sales.
As for the housing market we got a look at the latest data on foreclosures and forbearances showing 1.6 percent of homes are in forbearance. Although this is not a number we like to see, with the demand for housing so brisk there’s not much doubt that homes would likely be snapped up by the demand side of the market.
That’s what I have for you this week, friends. Keep in mind that now is still a fantastic time to refinance and take advantage of the equity you already have in your home! Give me a call/text or reply to this email and let’s discuss your specific scenario.