Above the 1.167 million expected, there is a rise of 2.1 percent shown for the July Housing Starts, which creates an annual rate of 1.21 million units. This zone is acting as a great encouragement in a somewhat foggy economy. Interestingly, multi-family units are at the top of the increase and, since the recession, the 1.21 million is the second-highest Housing Starts. The annual rate of Building Permits is 1.152 million which is down 0.1 percent from June, but what was expected. Given that potential buyers were struggling with a limited supply of home inventory, much of this news should be welcome!
Because of low energy costs, consumer inflation continued to be tame. As expected, the Consumer Price Index (CPI), remained the same from June to July. Fixed investments, like Mortgage Bonds, have reduced value through inflation. Therefore, home loan rates should be good, as they are related to Mortgage Bonds.
The Federal Open Market Committee (FOMC) analyzes inflation, among other economic factors, when determining monetary policy. Meeting minutes from the July FOMC which were recently released did not give a comprehensible guide as to when the Fed Funds Rate might change by the Fed. To lend money to other banks overnight, banks refer to this rate. Just a couple of days away, in September, the Fed has the next opportunity to revisit a rate change.
In summary, home rates continue to remain incredibly low, so it’s a great time to invest in homeownership.
If you or anyone else you know wants to discuss this information further or has any questions regarding home loan rates or products, please contact me or pass along my contact information!
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