Blog posted On August 10, 2018
Mortgage rates have not shifted significantly this week. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed job openings have increased to the third-highest level in the report’s 18-year history. Revolving consumer credit fell slightly after last month’s surge, and nonrevolving credit increased. Both new purchase and refinance applications declined.
The Labor Department reported there were 6.662 million job openings at the end of June, up slightly from May’s figure. The voluntary quit rate was unchanged at 2.3% and hiring increased slightly to a rate of 3.7%. The unemployment rate is holding steady at a rate of 3.9%. Analysts suggest that lack of wage growth may be to blame for the continued growth of job openings.
The consumer credit report showed a slowdown in June, after a six-month peak last month. Total consumer credit expanded at a rate of 3.1% by $10.2 billion to a seasonally adjusted total of $3.91 trillion. Revolving credit, like monthly credit card payments, is down slightly by 0.2%, compared to May’s steep 11.2% gain. Nonrevolving credit, or longer-term debt like car loans and student loans but not mortgage debt, increased 4.4% month-over-month. The data shows credit card spending and student loan borrowing has picked up this year after about three stagnant years. The low unemployment rate and expected wage growth should continue to fuel consumer spending and drive Gross Domestic Product (GDP) growth.
The Mortgage Bankers Association (MBA) weekly mortgage application survey continued to decline for the week ending 8/3. New purchase applications fell 2.0% and refinance applications declined 5.0% for a composite decrease of 3.0%. Even with record GDP gains and rock bottom unemployment, the housing market is hurting from lack of homes for sale driving home prices up. “Overall mortgage applications fell for the third straight week as housing continues to be hampered by the lack of homes for sale and crimped affordability," said Joel Kan, MBA vice president of economic and industry forecasting.
Today’s housing market is competitive, but it is possible to get your offer accepted. Most housing professionals recommend getting preapproved for a mortgage before you start shopping. At CMG Financial, we pre-underwrite our loans, so your preapproval is the first step in your mortgage application. The sooner you can secure mortgage financing, the more attractive your offer will be to the seller, who is most likely also about to enter the housing market as a buyer.