![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
MARKET COMMENT
Mortgage bond prices finished the week slightly lower which put upward pressure on rates. Rates were flat the beginning of the week amid mixed data. The NAHB Housing Index was 59 versus the expected 60. Housing starts were 1189K. Analysts looked for a reading of 1170K. Rates worsened Thursday morning in response to better than expected jobs data. Weekly jobless claims were a lower than expected 253K versus the anticipated 265K. The Philadelphia Fed business conditions index was down 2.9 versus the expected positive 5.0. This countered some of the selling pressure from the jobs data but we were still negative. The FHFA Housing index was up 0.2% as expected which did not result in any significant market movements.
Mortgage interest rates finished the week higher by approximately 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Consumer Confidence | Tuesday, July 26, 10:00 am, et | 98 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Tuesday, July 26, 10:00 am, et | 555K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Treasury Auctions Begin | Tuesday, July 26, 1:15 pm, et | None | Important. 2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday. |
| Durable Goods Orders | Wednesday, July 27, 8:30 am, et | Up 0.2% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Fed Meeting Adjourns | Wednesday, July 27, 2:15 pm, et | No rate changes | Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Weekly Jobless Claims | Thursday, July 28, 8:30 am, et | 259K | Important. An indication of employment. Higher claims may result in lower rates. |
| Q2 Advance GDP | Friday, July 29, 8:30 am, et | Up 1.1% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Q2 Employment Cost Index | Friday, July 29, 8:30 am, et | Up 0.6% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
HOUSE PRICE INDEX
The U.S. Energy Information Administration reported July 18, 2016 that the price of regular gasoline averaged $2.291 per gallon across the country. The Gulf Coast had the lowest average prices while the West Coast had the highest. These prices reflect an approximate two cent decrease from the prior week and a five cent decrease from the prior year.
A positive of the low prices for consumers is an increase in discretionary spending. Fuel savings give purchasers a boost in spending power and the vast majority of consumers spend that money.
One surprise negative side effect reported by the U.S. Department of Transportation is a reduction in the projected future fuel economy. People have adjusted the types of vehicles they purchase because of the low gas prices. Fuel economy will continue to improve however the government now expects it to be slightly lower than their initial 2025 goals of approximately 55 miles per gallon.
