California mortgage markets improved last week, pushing mortgage rates lower for the 6th time in seven weeks.
Since April, rates in California have been on a downward path, spurring refinances in most markets and sparking the start of a Refi Boom.
Last week, 3 key stories played a role in falling rates:
- Demand was strong for U.S. government debt
- Emerging concerns of a Japan-style deflation in the U.S.
- Personal Spending since late-2007 was shown to be less than previously thought
Of the three, it’s the measured drop in Personal Spending for which rate shoppers and home buyers in Temecula, Murrieta, Riverside, and Corona should watch. Drops in spending slow down the economy which, in turn, tends to pull mortgage rates lower.
Long-term, deflation could be a drag on rates, too. For now, though, it’s just a conversation among academics and economists.
This week, mortgage rates could move up or down — a lot hinges on the results on July’s Non-Farm Payrolls report.
More commonly called “the jobs report”, Non-Farm Payrolls hits the wires Friday at 8:30 AM ET. Markets are expecting a 75,000 net loss of jobs last month. If the actual number is higher, mortgage rates should rise. If the actual number is lower, mortgage rates should fall.
With the jobs numbers not due until Friday morning, expect choppy trading through Thursday’s market close. There’s a handful of economic data set for release including Personal Consumption Expenditures (Tuesday), Pending Home Sales (Tuesday) and Jobless Claims (Thursday). Each has the potential to move mortgage rates.
The Refi Boom is ongoing but when it ends, it will end in a hurry. If you’ve been thinking about a refinance, contact your loan officer about your options sooner rather than later.