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Posted On February 06, 2017
Mortgage rates fluctuated only slightly last week, and the Federal Open Market Committee (FOMC) voted to not raise interest rates. This week, the Labor Department releases its Job Openings and Labor Turnover Survey (JOLTS), the consumer credit report for December comes out, and the MBA releases its weekly mortgage purchase application index.
The Labor Department’s JOLTS report measures the monthly change in job openings and turnover rates. In November, the JOLTS report showed little change at 5.5 Million openings. This report is closely monitored by the FOMC to measure employment activity and gauge whether or not to raise interest rates.
Consumer credit tracks consumers’ outstanding credit and has a direct impact on interest rates. Nonrevolving credit measures large loans like vehicle, student, and mortgage loans. Revolving credit is the month-to-month credit card usage. Healthy growth in consumer credit can indicate a strengthened economy, but too much growth can mean that consumers are unable to pay back their debts.
The MBA releases its weekly mortgage purchase application index measuring new purchase applications and refinance applications. Mortgage applications have experienced some volatility over the past month, particularly in the FHA loan segment, after the issuance and subsequent suspension of the Mortgage Insurance Premium cut.
Last week, the FOMC determined it was not yet time to raise interest rates despite economic growth and a strengthened job market. With potential changes to fiscal policy on the horizon, the FOMC needs a clearer projection before moving rates.