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Mark Hemingway

Mortgage Market Update for July 2nd

Tuesday, July 2, 2019 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

CoreLogic reports that home prices nationwide, including distressed sales, rose annually by 3.6% in May 2019 from May 2018 and were up month-over-month by 0.9% in May 2019 compared with April 2019. The year-over-year 3.6% gain is a fraction of what gains were in the previous year, but at healthier levels and at equilibrium with wage gains. "Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May. This has been a shot-in-the-arm for home sales," said Dr. Frank Nothaft, Chief Economist for CoreLogic.

Continued slowing Eurozone economic growth is pushing global yields lower this morning while the US 10-year Note teeters on a psychological level. On the trade front, the US is threatening to slap tariffs on $4B worth of goods on imported EU goods. In addition, President Trump said that US/China trade talks have resumed but he can't accept a 50-50 deal. In response to the weak Eurozone economic data, the German 10-year Bund yield has fallen to a record low of -0.36% while yields in Spain and Portugal hit record lows. Australia's central bank cut its benchmark interest rate while the ECB will most likely cut in September. The US Federal Reserve is fully expected to cut the Fed Funds Rate by 25 basis points at its July 31 Fed meeting.

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