[Mortgage Minute] Week of Aug 1, 2016

Weak GDP Report Helps Rates

Mortgage rates also improved following the release of Friday’s disappointing GDP data. Second quarter gross domestic product (GDP), the broadest measure of economic growth, grew at a rate of just 1.2% in the second quarter, far below the consensus of 2.6%. This was the third straight quarter of growth below 2.0%.

In other news, the Fed meeting concluded with no change in the federal funds rate. The Fed statement modestly upgraded its assessment of the U.S. economy. In particular, the labor market has “strengthened” and consumer spending has been “growing strongly.” However, the overall tone of the statement was less hawkish than investors had expected, and mortgage rates improved a little after its release.

The housing sector remained a bright spot for the U.S. economy. Similar to the results for previously owned homes, sales of new homes rose in June to the best levels in about eight years.

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Week Ahead

Factors: The important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. In addition, the Bank of England meeting announcement could influence U.S. mortgage rates on Thursday.

 

Volatility:         Moderate

Trend:              Slightly Upward

 

For specific rates, please contact a Tradition Mortgage loan officer.