The average 30-year mortgage fixed rate was 4.99% in the end of July, making this week’s average 30-year mortgage fixed rate of 5.5% seems a big jump. Based on Fed’s minutes released this week, the Fed will continue to increase rates until the rate of inflation is significantly eased. This announcement created some jitters in the mortgage interest rate market with fears of more volatility and uncertainty. The rates changed multiple times on Wednesday, 8/17. While there’s no indication of the pace of the rate rising, investors are speculating the next increase will be 0.5% in September, rather than 0.75%.
The job market remains strong with weekly unemployment claims decreasing to 250,000. Consumer spending numbers are up as a gasoline price drop frees up money for spending. Combining with strong wages, many believe that economy will remain out of recession.
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