Cooling labor market gives Fed breathing room
U.S. employers continued to add jobs in August with the nonfarm payrolls rising a solid 187,000 last month. Over the last three months, 150,000 jobs were added on average per month, a decline from the 238,000-average registered between March and May.
Mortgage rates dip for the first time in six weeks
After climbing consecutively for five straight weeks, the average 30 year fixed-rate mortgage reported weekly by Freddie Mac ticked down at the end of August but remained above 7%. With costs of borrowing near their record high and housing supply expected to be tight for the remainder of the year, home sales could remain soft in the next couple months.
Consumer confidence slips as jobs gain ease
Consumers felt less optimistic in August about the current conditions and their outlook as the job market slowed, while food and energy prices inched up again. More than 43 million American borrowers will begin making payments to their student debt again next month, and many of them will have less money to spend on goods and services once the re-payment begins. The economy will be impacted but the effect is not expected to be significant.
Delinquency rate remains near all-time low
The latest monthly figure was near its all-time low and was significantly below the high recorded in 2009/2010 when the housing market collapsed. This is well below the double-digits high recorded back in the Great Recession. The counties with the highest foreclosure rate in California were Yuba, Shasta, Sierra, and Tulare.
Mortgage applications increased for the first time in five weeks, but the market remains stuck
With rates showing signs of leveling off, mortgage applications went up from a week ago by 2.3% on a seasonally adjusted basis. the market could pick up some momentum in coming weeks if rates continue to move sideways or decline.
As the job market continues to show signs of easing, it is looking more likely that the Fed may not raise rates in their upcoming September meeting. Mortgage applications just started rising after five weeks of retreat, and the housing market could build on its momentum if rates continue to move sideways or even decline in the next few weeks.
SOURCE : California Association of Realtors