Senior Loan Officer | NMLS #174108
Branch NMLS #1815933
Posted On July 09, 2018
With the short week last week, mortgage rates did not move much up or down. There are no significant housing reports scheduled for this week, other than the weekly mortgage application survey set for release on Wednesday. The consumer credit report comes out on Monday and the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday.
Consumer credit measures total outstanding consumer debt, segmented by revolving and nonrevolving credit. Revolving credit includes regular bills, like monthly credit card payments, and nonrevolving credit includes longer term debt, like car payments and student loans, but excludes mortgage debt. Consumer borrowing can be a sign of economic strength, as consumers are confident they will be able to repay their debts. It can also be cause for concern if consumers are borrowing too much to offset sluggish wage growth and low savings. Consumer borrowing slowed in April, driven by a decline in nonrevolving credit.
Last month’s JOLTS report showed that there are more job openings than people out of work, for the second month in a row. In April, there were almost 6.7 million job openings. Despite the disparity, wage growth has not caught up in the heated labor market. Cathy Barrera, chief economist at ZipRecruiter, explained, "If employers want to fill these 6.7 million job openings, they are either going to have to raise wages or find more clever and creative ways to recruit workers off the sidelines.”
The weekly mortgage application survey tracks changes in new purchase and refinance mortgage application submissions from week to week. For the week ending 6/29, new purchase applications increased 1.0% and refinance applications decreased 2.0% for a composite decrease of 0.5%. Most homeowners who could benefit from a mortgage refinance have already secured a lower rate. According to CoreLogic, more than half of all mortgaged homeowners have an interest rate lower than 4%.
A strong labor market and healthy consumer spending typically translates into positive housing market activity. The biggest obstacle facing home buyers today is lack of available inventory for sale. In today’s red-hot housing market, many sellers are receiving multiple offers on a home in a matter of weeks or even days. One way to make your offer more competitive is to partner with a mortgage lender that can ensure a quick and efficient transaction. The right lender could mean the difference between getting your offer accepted or losing to another buyer.