What’s Ahead For Mortgage Rates This Week – August 16, 2021

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Last week’s economic reporting included readings on job openings, inflation, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Job Openings Rise as Inflation Rate Falls

The Labor Department reported a record number of job openings for the fourth consecutive month in June. Job openings rose to 10.1 million available jobs from May’s reading of 9.5 million job openings. Analysts expected job openings to decrease to 9.1 million jobs in June.

Analysts said that previous headwinds to hiring including generous unemployment benefits and childcare issues may be easing. Workers took advantage of the rising demand for employees to negotiate higher wages and switch jobs for better offers.

The Consumer Price Index fell by 0.40 percent in July to 0.50 percent as compared to June’s reading of 0.90 percent. The pace of year-over-year inflation remained at 5.40 percent  Core inflation, which excludes volatile food and fuel sectors, fell to 0.30 percent from 0.90 percent. July’s reading showed the impact of food and gas prices on inflation in recent months.

Mortgage Rates Rise, Jobless Claims and Consumer Sentiment Index Fall

Average mortgage rates rose last week as the rate for 30-year fixed-rate mortgages rose by 10 basis points to 2.87 percent. Rates for 15-year fixed-rate mortgages averaged 2.15 percent and were five basis points higher; rates for 5/1 adjustable rate mortgages averaged four basis points higher at 2.44 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 375,000 new claims filed as compared to the prior week’s reading of 387,000 first-time claims filed. Continuing jobless claims also fell; 2.87 million ongoing claims were filed last week as compared to the prior week’s reading of 2.98 million continuing jobless claims filed.

The University of Michigan reported its lowest reading for consumer sentiment since 2011. The preliminary reading for August fell to an index reading of 70.2 in August as compared to July’s reading of 81.2. Analysts expected an index reading of 81.3 for August, but rising covid 19 cases attributed to the highly contagious Delta form of the virus tanked consumer sentiment as mask requirements and social distancing guidelines re-emerged in some areas.

What’s Ahead

This week’s scheduled economic releases include readings from the National Association of Home Builders on housing markets, government readings on housing starts, and building permits issued. Retail sales will also be reported.