Market Recap: Hurricane Watch Continues, Fed Beige Book, and Mortgage Applications
Mortgage rates dropped slightly this week. Hurricane Harvey recovery is underway in Texas and the government agreed to a short-term debt ceiling extension, in part to help fund the relief effort. Additional hurricanes are forming in the Atlantic and the Gulf of Mexico. Mortgage application submission increased amidst rising rates. The Federal Reserve released its Beige Book on Wednesday.
For the first time since 2010, there are now three active hurricanes in the Atlantic basin. While Texas is recovering from Hurricane Harvey, Florida is preparing for the impact of Hurricane Irma. Hurricane Jose is expected to follow Hurricane Irma, and Hurricane Katia is strengthening in the southern Gulf of Mexico.
With the recent downward trend in mortgage rates, mortgage applications filed increased for the week ending 9/1. New purchase applications are up 1.0% and refinance applications are up 5.0% for a composite increase of 3.3%. The Federal Open Market Committee (FOMC) is scheduled to meet in two weeks and the odds of a rate hike are largely mixed. Homeowners may be opting to refinance ahead of time, in case a rate hike does take place.
The Federal Reserve released its Beige Book on Wednesday, ahead of the policy meeting later this month. Automotive retail sales were notably weak, with numerous districts concerned about low sales and increasing inventory. In August, vehicle sales slowed to the lowest rate in three years. Overall, however, the economy sustained modest-to-moderate growth.
The FOMC meets on September 19 and 20 to discuss economic policy. In December 2016, Fed Chair Janet Yellen projected three rate hikes in 2017. So far, two rate hikes have taken place. In lieu of the hurricanes and disaster relief, some analysts are expecting the third rate hike to take place later in the year at the December meeting.
Sources: Bloomberg, CNN, MarketWatch, Mortgage News Daily, NBC