Market Studies

Fixed mortgage rates increased this week following the Federal Open Market Committee's affirmation that it intends to stay the course on its bond purchasing policy. According to Freddie Mac's survey, the 30-year fixed-rate mortgage (FRM) averaged 4.39 percent (0.7 point) for the week ending August 1, up from 4.31 percent last week. Last year at this time, the 30-year fixed averaged 3.55 percent. Bankrate.com's weekly national survey also showed interest rates climbing slightly. The 30-year fixed average rose to 4.59 percent this week.

Undoubtedly, broadening eligibility for the Home Affordable Refinance Program (HARP) has allowed more borrowers to benefit from the program. However, HARP rules aren't the only obstacles stunting refinance volume. A report from the Federal Housing Finance Agency Office of Inspector General (FHFA OIG) found a lack of borrower education is also a critical barrier to the program. ""[M]any borrowers have not heard of the program, confuse the program with other government housing programs, or do not realize that they are eligible,"" the report stated.

First-time claims for unemployment insurance dropped to the lowest level in five years, falling 19,000 to 326,000 for the week ending July 27, the Labor Department reported Thursday. Economists expected the number of claims to edge up to 345,000 from the 343,000 originally reported for the week ending July 20. The number of filings for that week was revised to 345,000.

The FOMC voted Wednesday to continue its policy of near-zero interest rates and its $85-billion-per-month bond-buying program. In a subtle change of language designed to assuage nervous stock investors, the FOMC statement said the committee ""reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.""

Mortgage application volume declined last week at a more sudden rate than in previous weeks, according to data from the Mortgage Bankers Association (MBA).

Home prices in the Las Vegas area soared to the highest point in nearly five years while cash sales also reached record levels, according to DataQuick. New and existing homes and condos in Clark County sold for a median price of $169,100 in June, representing an increase of 3.7 percent from May and a 35.3 percent jump from a year ago. Despite the significant improvement, Las Vegas still has a long way from to go when compared to its November 2006 peak of $312,000.

Rising interest rates aren't just a burden for potential homebuyers. According to the latest survey from Redfin, 47 percent of sellers said they are worried about rising rates, expressing concerns that buyer demand will be lowered as a result. The share is up drastically from 23 percent in the previous quarter. Additionally, sellers expressed less interest when considering the option of renting for the first time in four months. In the third quarter of this year, 49 percent said they are considering renting rather than selling, down from 52 percent in the previous quarter and down from 46 percent a year ago.

The nation’s economy grew at a 1.7 percent annual rate in the second quarter, the Bureau of Economic Analysis reported Wednesday. Growth exceeded economist forecasts but remained slower than the growth rate needed to add jobs. In the first quarter, GDP grew 1.1 percent and in the second quarter last year, the economy grew at a 1.2 percent annualized rate.

According to a survey from the Bankers Association (MBA), commercial and multifamily loan originations are up both quarterly and over the year. Originations increased by 36 percent from the first quarter to the second quarter, with the greatest increase in activity occurring among hotel properties, which experienced an 89 percent increase over the quarter.

The Conference Board's Consumer Confidence Index, which had increased for the third straight month in June, pulled back to 80.3 in July as its two sub-components moved in different directions. ""Consumer Confidence fell slightly in July, precipitated by a weakening in consumers' economic and job expectations,"" said Lynn Franco, director of economic indicators at the Conference Board. ""Consumers' assessment of current conditions continues to gain ground and expectations remain in expansionary territory despite the July retreat.""