Soaring consumer confidence, a strengthening economy and a tight labor market sent Bond prices lower, yields higher and mortgage rates higher this week. Freddie Mac reports that the 30-year fixed-rate mortgage rose seven basis points in the latest week to 4.72% with an average 0.5 tacked on in points and fees. Freddie Mac said that housing constraints and home price gains are beginning to ease, which should keep housing demand up in the near future.
Final economic growth in the second quarter of 2018 grew at a robust pace due in part to increased consumer and business spending along with investment increases. The Bureau of Economic Analysis reported that Gross Domestic Product (GDP) rose 4.2% in the second quarter, the best reading since the third quarter of 2014. The Atlanta Federal Reserve is forecasting that GDP in the third quarter of 2018 will rise 4.4%.
In other economic news, very strong data from August Durable Orders shows they are up 4.5% from -1.2% in July, which helped to lift the U.S. Stock markets. Durable Orders are those products that tend to be on the expensive side and last for at least three years. Weekly Initial Jobless Claims continue to hover near lows seen in the late 1960s coming in at 214,000 in the latest week.
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