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Forget a rate cut any time soon

Mortgage market commentary

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Long-term rates have confirmed their over-the-holidays rise, but are taking strong economic news very well, mortgages holding at 6.125 percent. December payrolls grew by a healthy 167,000 jobs, way above consensus forecast, and wages rose .5 percent in the month, nearly double the forecast. The December purchasing managers' manufacturing index rose above break-even to 51.4, out of its November trough, and the service sector held a strong 57.1. Christmas sales were on the shaky side, but most of the weakness can be charged off to warm-weather damage to clothing sales. Oil cracked $55/bbl early this morning, warm weather in play there, too. I suspect also at work is a delayed reaction to the price spike now 18 months old. It takes time for a spike to suppress demand and encourage supply, especially with a structural increase in consumption coming from China (ramping up at least a half-million barrels per day per year), but if you double prices, you're going to get a downward price co...