Blog posted On October 11, 2019
Mortgage rates have not moved significantly this week and remain historically low. Consumer credit growth expanded at a somewhat weaker rate, driven by a drop in credit card borrowing. Mortgage application submissions were mixed. Job openings declined.
Total consumer credit expanded by $17.9 million at an annual growth rate of 5.2%. Weaker credit card spending constricted growth, revolving credit fell 2.2% in August. Nonrevolving credit, like car loans and student loans, increased 7.8% in August. Business investments has dropped off, and companies are hiring less workers, threatening consumer credit growth.
For the week ending 10/4, new purchase application submissions declined 1.0% and refinance application submissions jumped 10.0% for a composite increase of 5.2%. Historically low mortgage rates are triggering refinance activity but home buyers are proceeding more cautiously because of greater overall uncertainty. Joel Kan, associate vice president of economic and industry forecasting at the MBA, stated, “Despite low rates, the cloudier economic outlook and ongoing market uncertainty may be keeping some potential home buyers away from the market this fall.”
Job openings fell slightly in August, down to a level of 7.051 million. August’s figure marks an 8% decline since the start of the year. However, the number of open jobs still exceeds the 5.8 million Americans classified as unemployed. The voluntary quits rate fell to a level of 2.3%. Workers are more likely to quit voluntarily if they are confident they will find comparable employment. Economists attribute this month’s stats to global economic slowdown.
The Fall is typically less busy for home buyers compared to the Spring and Summer. However, with historically low mortgage rates, buyers who previously halted their home search could find a better deal. If you’re looking to make real estate moves in the upcoming months, talk with a loan officer first. Mortgage preapproval helps you make a more competitive offer and get your offer accepted faster.