Market Forecast: Job Openings, Mortgage Applications, and Consumer Credit
Last week, the Federal Open Market Committee voted for its first rate cut in 10 years. Mortgage rates reacted by trending downward. This week, the only significant housing report will be the Mortgage Bankers Association (MBA) weekly mortgage application survey. Other market-moving reports include the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) and consumer credit.
The JOLTS report reviews month-to-month changes in job openings, hiring, and voluntary quits. Job openings slipped to a level of 7.323 million in May and hiring also saw a month-over-month decline, down to a rate of 5.725 million. Voluntary quits did not change much, down slightly to a level of 3.425 million. The unemployment rate has been historically low for the past few years.
The MBA weekly mortgage application survey tracks week to week changes in new purchase and refinance mortgage application submissions. For the week ending 7/26, new purchase application submissions fell 3.0% and refinance application submissions nudged up 0.1% for a composite decrease of 1.4%. Prospective home buyers and homeowners looking to refinance may have been waiting for the Fed to cut rates before making real estate moves.
Consumer credit tracks month-to-month changes in revolving and nonrevolving credit. Consumer credit expanded again in May, after a gainful April, reaching an annual growth rate of 5%. Revolving credit, like monthly credit card debt, increased 8.2% month-over-month and nonrevolving debt, like car and student loans, is up 3.9% month-over-month. Analysts are calling May’s growth a positive indicator for growth in the coming months.
Many American homeowners may be considering a mortgage refinance after last week’s rate cut. A refinance is an opportunity for homeowners to lower their monthly mortgage payment, withdraw cash from their home to fund home improvement projects, or change the terms of their loan. If you have any questions about a mortgage refinance, please let me know.
Sources: CNBC, Econoday, MarketWatch, Mortgage News Daily