Mortgage Rates and the price of Mortgaged-Backed Securities (MBS) moved sideways this week. The last two months have been unfortunate for Mortgage Rates as they are now up close to 1/4% from this time last year.
Rents – Apartment List released their National Rent Report and it showed that rents are down 0.8% year over year (Portland is slightly worse at -1.2%). This is a slight improvement from last month which came in at -1%. The 0.1% rise in rents during the month of August was the seventh consecutive increase, and the first time August has seen a positive number since 2022.
Inflation – The current Fed chair is looking to other inflation index to be more ‘proactive’ in theirpolicy. This inflation index is the Dallas Fed Trimmed Mean Inflation report and it is designed to reveal underlying inflation by excluding outliers and price shocks (think temporary spike on eggs/milk/computer chips etc.). It does this by removing the top 31% inflation gainers and the bottom 24% of items decreasing in price. For example, in July’s report, oil prices (which would have helped inflation move lower) were removed. Portfolio management and computers/chip related items were also removed. Overall the report showed that inflation rose 0.18% in July remaining at an unchanged 2.3% year over year clip.
Fed Chair Kevin Warsh gave the keynote at the Jackson Hole Fed meeting and his tone was notably more hawkish. He alluded to a potential hike but did not make a hard commitment. Fed Futures have priced in a 100% chance of one 25bps hike by years’ end.
New Home Sales – the US Census released their New Home Sales report and that showed signed contracts on new homes fell 10.5% in July to annualized rate of 607,000. Sales are down 6.3% year over year.
Home Values – the Case Shiller Home Price Index showed that home values rose 0.4% and are up 1.5% year over year.
Mortgage Applications declined by 1% from last week. Purchase applications decreased by 0.3% last week are down 5% year over year. Refinance activity declined 2% last week and are down 17% year over year.
Oil Prices remained flat at $88.15, no change from last week. Last year prices were closer to $65 per barrel.