Mortgage Rates & Market Commentary 7/23/16 Tucson AZ

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Real Estate Agent with Tierra Antigua Realty SA624527000

 

 

 

Mortgage bond prices finished the week slightly lower which put upward pressure on rates. Rates were flat the beginning of the week amid mixed data. The NAHB Housing Index was 59 versus the expected 60. Housing starts were 1189K. Analysts looked for a reading of 1170K. Rates worsened Thursday morning in response to better than expected jobs data. Weekly jobless claims were a lower than expected 253K versus the anticipated 265K. The Philadelphia Fed business conditions index was down 2.9 versus the expected positive 5.0. This countered some of the selling pressure from the jobs data but we were still negative. The FHFA Housing index was up 0.2% as expected which did not result in any significant market movements. Mortgage interest rates finished the week higher by approximately 1/8 of a discount point.

Gas Prices

The U.S. Energy Information Administration reported July 18, 2016 that the price of regular gasoline averaged $2.291 per gallon across the country. The Gulf Coast had the lowest average prices while the West Coast had the highest. These prices reflect an approximate two cent decrease from the prior week and a five cent decrease from the prior year.  A positive of the low prices for consumers is an increase in discretionary spending. Fuel savings give purchasers a boost in spending power and the vast majority of consumers spend that money.

One surprise negative side effect reported by the U.S. Department of Transportation is a reduction in the projected future fuel economy. People have adjusted the types of vehicles they purchase because of the low gas prices. Fuel economy will continue to improve however the government now expects it to be slightly lower than their initial 2025 goals of approximately 55 miles per gallon.

 

 

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