From Stuart Crawford at VIP Mortgage:
Last week mortgage rates gave back some of the improvement seen following the prior week's Fed meeting. The reversal was helped along by comments from Fed Chair Yellen. Recent economic data was mixed and had little impact, and as a result mortgage rates ended the week a little higher.
On Thursday night, Fed Chair Yellen gave her first speech since the Fed meeting on September 17th. She clarified many of the issues which had created uncertainty for investors. She expects that a federal funds rate hike will be appropriate before the end of the year. She also reassured investors that the U.S. economy is strong enough to handle a rate hike. She noted that the impact of global economic weakness on the U.S. was not likely to be significant enough to have much influence on future Fed policy. After her speech, global stock markets rallied and mortgage rates moved higher.
The housing data released last week was encouraging, with August new home sales increased 6% from July to the highest level in over seven years. Also, new home sales were 22% higher than a year ago.
This week we will have the all-important Employment report being 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.
Stuart can be reached at 480.776.2954