Blog posted On July 06, 2020
Mortgage rates continued to trend downward last week. This week, the most significant housing report scheduled for release is 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 Labor Department’s JOLTS report declined to a level of 5.05 million in April, the lowest level since December 2014. Total separations also dropped to a level of 9.9 million as cities and states reopen and workers go back to work. The hiring rate increased to a level of 3.5 million. The report lags by one month and is just starting to show signs of recovery.
The weekly mortgage application declined for the week ending 6/26. New purchase applications dropped 1.0% and refinance applications slipped 2.0%, for a composite decrease of 1.8%. After several months of increases, buyer demand has started to level off. MBA economist, Joel Kan commented, “the average purchase application loan size increased to a record high in our survey – more proof that tight inventory conditions are leading to faster price growth.”
Consumer credit tracks month to month changes in total outstanding consumer credit segmented by revolving credit and nonrevolving credit. In April, total consumer borrowing decreased at a rate of 19.6%. Revolving credit, like monthly credit card payments, dropped 64.9% month-over-month. Nonrevolving credit, including auto and student loans but excluding mortgage payments, declined 4%. On the other side, the savings are reached a record high in April as consumers reduce spending and increase saving.
Mortgage rates are expected to stay low this summer, and many homeowners could benefit from a refinance, even if the home was purchased in the last few years. If you have any questions about refinancing and whether or not you can lower your monthly mortgage payment, please let us know!