Loan Officer | NMLS #238561
Branch NMLS #920781
Posted On August 07, 2017
Mortgage rates slid slightly last week, as expectations for additional 2017 rate hikes have dropped. This week, there are no significant housing reports scheduled other than the weekly mortgage application survey on Wednesday. On Monday, consumer credit comes out and on Tuesday the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) will be released.
The consumer credit report measures the total outstanding debt of American consumers segmented by nonrevolving debt, like student and auto loans, and revolving debt, like monthly credit card bills. In May, total outstanding consumer credit was $18.4 billion. Borrowing and spending are signs of economic strength, however, when consumers are borrowing too much it may be a sign of low wages or other upcoming economic stressors.
The JOLTS report tracks job openings, hirings, and voluntary quits. When the job market is strong, employees are confident enough to voluntarily quit because they believe they can find another qualifying job. In May, there were 5.666 million job openings.
The MBA mortgage application survey tracks weekly changes in new purchase and refinance applications. Mortgage rates have trended lower following the Federal Open Market Committee’s June and July policy meetings. Last week, new purchase applications dropped 2.0% and refinance applications dropped 4.0% for a composite decrease of 2.8%.
A strong labor market triggers economic momentum and consumer spending makes up two-thirds of national Gross Domestic Product. These economic numbers also influence housing. When consumers are gainfully employed and spending, they are also likely to make big purchases like housing.