The Dogless Days of August
The dog days of August are a time when everything slows down. People are on vacation and those who stay home are moving slowly because it is so hot. But not this year. This August, there seems to be no letup in the markets and the news. Do you want news? How about a Presidential election occupying the front pages every day? We also have the Olympics going on in the midst of a Zika virus alert and a doping scandal.
The markets are making a lot of noise as well. The stock market has bounced back from the shock of Brexit and set new records. Oil prices have plunged back to near $40 per barrel and interest rates have hovered near record lows. Even though the economy seems to be dragging, the jobs creation machine has not slowed down one iota, and the real estate market continues to show strength. There is so much going on that we wonder how things could get any livelier come September when we are supposed to wake up from our summer slumber.
One things for sure, the Presidential election will be heating up come September. We will also start the month with another jobs report released early before Labor Day. And just for good measure, the Federal Reserve Board will be meeting and this should be their last chance to raise interest rates before the election. We say that it is the last chance, because the next meeting after September is just a few days before the election, and we don’t expect the Fed to take any major stance at that time. It has been a busy summer season and it looks like things will stay hot this fall. And we are not talking about global warming here.
The Weekly Market Update
Rates rose slightly in the past week. For the week ending August 11, Freddie Mac announced that 30-year fixed rates increased to 3.45% from 3.43% the week before. The average for 15-year loans eased up to 2.76% and the average for five-year adjustables rose one tick to 2.74%. A year ago, 30-year fixed rates were at 3.94%, approximately one-half of one percent higher than today's levels.
Attributed to Sean Becketti, Chief Economist, Freddie Mac -- "A surprisingly strong July jobs report showed 255,000 jobs added and 0.3 percent wage growth from last month, exceeding many experts' expectations. In response, the 10-Year Treasury yield rose to its highest level since June and the rate on 30-year fixed home loans increased 2 basis points to 3.45 percent."
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.