Market Recap: Job Openings are Up, Consumer Borrowing Expands, New Purchase Apps Improve
Mortgage rates trended slightly downward this week. There were no market moving housing reports released. September’s job openings report showed little change. Consumer credit greatly exceeded market expectations. New purchase mortgage applications improved, but refinance applications declined.
In September, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed the addition of 6.09 million jobs, just slightly higher than August’s figure, marking the third-highest vacancy total of the year. The labor market has not seen vacancies surpass 6 million since this data collection began in late 2000. Since this data is from September, some blame the effects of the hurricane for limiting activity.
Consumer credit exceeded expectations in September, up to a level of $20.8 billion, for an annual growth rate of 6.6%. Nonrevolving credit, like student and car loans, is up 6.3% year-over-year and 3.3% month-over-month and revolving credit, like credit card debt, is up 7.7% year-over-year and 6.7% in August. Overall, lending has been stable, specifically in terms of credit card lending. Student loan borrowing also tends to pick up in September when the school year starts.
The Mortgage Bankers Association’s (MBA) weekly mortgage application survey improved slightly after last week’s declines. For the week ending 11/3, new purchase applications improved 1.0% and refinance applications declined 1.0% for an unchanged composite index. Slowdown in refinance activity is likely to continue as mortgage rates continue to trend upward.
The Mortgage Bankers Association predicted that new purchase origination volume will increase while refinance origination volume scales back. While the Federal Reserve is still expected to raise rates one more time this year, that hike will likely take place in December.
Sources: Bloomberg, MarketWatch, Mortgage News Daily, US News and World Report