Another Fed Rate Hike
Overview: Over the past week, the only significant market-moving news was the Federal Reserve meeting, and even this event had only a minor net effect on mortgage rates. The economic data released this week had little impact, and rates ended slightly lower.
Current economic conditions, including record highs in the stock market, a solid labor market, and faster wage increases, have boosted the optimism of Americans. The latest reading of consumer confidence revealed an unexpectedly large increase to the highest level since September 2000. In a similar fashion, weekly jobless claims dropped to the lowest reading since 1969. Despite all the good news, though, home sales have been somewhat of a laggard this year, mostly due to a lack of inventory.
After four straight months of declines, sales of previously owned (existing) homes were flat in August. The inventory of existing homes for sale was also flat from July at a 4.3-month supply, which is well below the level viewed as a healthy balance between buyers and sellers. A small bright spot was that inventory was a little higher than a year ago, which marked the first year-over-year increase in about three years.
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