Weekly Economic Update - 4.2.18
I hope you had a nice weekend.
RATE MOVEMENT (from prior week) UNCHANGED
It was a relatively quiet holiday-shortened week for mortgage markets. The economic data contained no major surprises and caused little reaction. Mortgage rates were relatively unchanged.
IMPORTANT ECONOMIC FACTORS:
Inflation Data - As expected, the most recent inflation data revealed a slight increase. In February, the core PCE price index was 1.6% higher than a year ago, up from an annual rate of 1.5% last month. This was the highest level since May 2017. Fed officials have stated that they would like to see the annual rate of inflation rise to 2.0%. Remember, the Fed monitors inflation very closely and utilizes this as a gauge to time rate increases.
Housing Data - Following unexpectedly weak results in January, the pending home sales data rebounded nicely. In February, contracts signed to purchase previously owned homes increased 3% from January. Although, despite the February gains they still were 4% lower than a year ago. Contracts signed are viewed as a leading indicator of actual closings, which are revealed each month in the report on existing home sales.
Looking ahead, the important monthly Employment report will be released this 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. Investors closely watch for the results of this report to gauge the “health” of the economy which in turn they use to move money and that triggers rate movement. Typically it is risky to “float” into the labor data, so we watch closely on our end to help gauge the best timing of the client’s rate lock.
Please let me know if you have any questions in regards to this.
Thank you for your continued support, have a productive week.
SVP, Regional Manager
THE CRAWFORD TEAM