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This week in the mortgage world

August 22nd, 2014 3:45 PM by Jonathan White

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Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

Co. NMLS MB2218

Call: 781.235.2583 (BLUE)

20 Walnut Street

Suite 12

Wellesley, MA 02481



Ukraine, Housing Data, and the Fed


Reduced concerns about the conflict in Ukraine caused investors to shift back to riskier assets early this week, reversing much of the improvement in rates from the prior week. Stronger than expected housing data and slightly more hawkish comments from Fed officials also were negative for mortgage rates. As a result, mortgage rates ended the week a little higher.


The housing data released this week reflected nice improvement. July Existing Home Sales increased 2% from June to the highest level since September 2013. The inventory of existing homes for sale rose to a 5.5-month supply and is 6% higher than one year ago. The Chief Economist of the NAR suggested that stronger job gains and "improving inventory conditions" have been boosting sales activity.


July Housing Starts and Building Permits also exceeded expectations. The August NAHB Housing Index showed that home builder confidence increased to the highest level since January. 


The Minutes from the July 30 Fed meeting released this week contained no major surprises, but they were a bit more hawkish than expected. The big debate among Fed officials concerned the amount of slack in the labor markets. The Minutes noted that the labor market has improved more quickly than expected over the past year and that labor market conditions have moved significantly closer to "normal in the longer run". Still, most Fed officials believed that it was too soon to move forward the expected timeline for fed funds rate hikes. 



The situation in Ukraine will continue to influence mortgage rates next week. In the US, New Home Sales will be released on Monday. Durable Orders will come out on Tuesday. Pending Home Sales and revisions to second quarter GDP will be released on Thursday. Core PCE inflation and Personal Income are scheduled for Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. 



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Posted in:General
Posted by Jonathan White on August 22nd, 2014 3:45 PM


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