Loan Officer | NMLS #91019
Branch NMLS #1627273
Posted On June 08, 2018
Mortgage rates did not move significantly this week, leveling off this month after climbing in May. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed recorded growth in job openings. Both new purchase and refinance applications turned around after several weeks of declines. Consumer credit growth was modest.
Job openings increased in April, to a level of 6.698 million, marking the best figure in the past 18 years. Durable-goods manufacturing jobs and information sector jobs saw increases, but finance and insurance openings decreased. The quits rate was unchanged at 2.3%. Openings continue to surpass hirings suggesting that employers are still struggling to find skilled workers to fill open positions. The unemployment rate recently hit an 18-year low as the labor market nears full employment.
The Mortgage Bankers Association (MBA) weekly mortgage application saw an increase in mortgage applications for the week ending 6/1. New purchase application submissions were up 4.0% and refinance application submissions were up 4.0% for a composite increase of 4.1%. Mortgage rates started to trend downward late last month, and home buyers seem to be taking advantage of the interest rate reprieve. MBA economist, Joel Kan, explains, “concerns over Italy’s political turmoil, and questions about the possible imposition of trade tariffs by the US on its major trade partners, pushes Treasury rates lower this week.”
Consumer credit posted its smallest increase in seven months in April, dampened by a slowdown in credit card use. Total consumer credit is down 3.8% month-over-month to a level of $9.3 billion, but up 2.9% annually. Nonrevolving credit, including student loans and auto loans but not mortgage loans, increased 3% month-over-month, the slowest pace since last September. Nonrevolving borrowing typically picks up in September with students going back to college. Revolving credit, like monthly credit card debt, grew 2.6% month-over-month. Some economists posit tighter lending standards to lessened credit card use, however, borrowing was especially strong in Q4 2017 after hurricane and fire damage in the Southeast and West.
Next week, the Federal Reserve will hold its Federal Open Market Committee (FOMC) meeting. The market is pricing in a rate hike, supported by a strong labor market and inflation nearing the Fed’s targeted rate. In December, the Fed forecast three rate hikes in 2018 and so far has raised rates once.