Mortgage Rate Outlook: Predictions for the Week of July 10, 2023


Construction Spending Increases in May, Year-Over-Year Growth Continues

The Commerce Department reported that construction spending in May rose by 0.90 percent, surpassing the 0.40 percent increase in April. The year-over-year data showed a total of $1.93 trillion spent on construction in May, indicating a 2.40 percent growth compared to the previous year.

Private-Sector Job Growth Surpasses Expectations in June

Private-sector job growth experienced a significant boost in June, with 497,000 jobs added, marking the highest increase since July 2022. This figure surpassed analysts’ predictions of 220,000 jobs and countered concerns of the Federal Reserve’s interest rate hikes slowing down inflation and economic growth. May’s reading reported 267,000 jobs added.

National Unemployment Rate Drops, Weekly Jobless Claims Rise

The national unemployment rate decreased from 3.70 percent in May to 3.60 percent in June, indicating a positive trend. However, weekly jobless claims increased to 248,000 claims from the previous week’s 236,000 claims filed. Analysts had anticipated a lower reading of 220,000 claims.

Fed Holds Interest Rate Range Steady, Expects Two More Increases

During the Federal Open Market Committee (FOMC) meeting in June, members decided to maintain the interest rate range at 5.00 percent to 5.25 percent. The decision was driven by the strong labor market and better-than-expected economic conditions. Fed Chair Jerome Powell stated that the interest rate range would likely be raised twice more in 2023.

Mortgage Rates Rise, Impacting Fixed-Rate Mortgages

Freddie Mac reported an increase in average mortgage rates. The rate for 30-year fixed-rate mortgages rose by 10 basis points to 6.81 percent, while 15-year fixed-rate mortgages averaged 6.24 percent, reflecting an 18 basis point increase.

Upcoming Economic Reports: Consumer Inflation, Consumer Sentiment, and Job Market Updates

In the coming week, economic reports will provide insights into consumer inflation, with both month-to-month and year-over-year readings. The final monthly reading on consumer sentiment will also be released, along with regular updates on mortgage rates and jobless claims.


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