The U.S. House Committee on Financial Services will host a Virtual Hearing “Monetary Policy and the State of the Economy,” set for Wednesday, July 14, 2021 at 12:00 p.m. ET.
At the hearing, Jerome H. Powell, Chairman, Board of Governors of the Federal Reserve System, will present the Fed's Semiannual Monetary Policy Report.
In Q1 of 2021, current‑dollar gross domestic product (GDP) increased 11.0% at an annual rate, or $566.3 billion, to a level of $22.06 trillion. In Q4 of 2020, the GDP increased 6.3%, or $324.5 billion. Economic growth indicators, including the GDP and the employment rate, influence mortgage rates, as strong growth brings higher wages and greater consumer spending, including consumers seeking mortgage loans for home purchases.
As we enter Q3, mortgage rates continue to sit below the 3% mark, as the allure of record low rates is enticing some to refi or jump into the housing market. However, affordability has been factoring into the decision-making process for many potential homebuyers as short supply and increased demand continues to price many out of the market, unable to take advantage of sub-3% rates.
CoreLogic’s latest Home Price Index (HPI) and HPI Forecast for May 2021 has found that nationally, home prices increased 15.4% in May 2021, compared to May 2020, and month-over-month, home prices increased by 2.3% compared to April 2021’s findings.
Powell is sure to report on the improvements in the jobs market, thus fueling a post-pandemic overall economy, as the Bureau of Labor Statistics (BLS) reporting that the American economy added 850,000 jobs in the month of June.
As recently noted by Sam Khater, Freddie Mac’s Chief Economist, “Mortgage rates decreased this week following the dip in U.S. Treasury yields. While mortgage rates tend to follow Treasury yields Freddie Mac closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs report. We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around 3%.”
Here's what else is happening in The Week Ahead:
- MBA’s Forbearance and Call Volume Survey (Monday)
- Federal Housing Finance Agency (FHFA) Duty to Serve Listening Sessions (Monday, Tuesday and Wednesday)
- MBA Weekly Applications Survey (Wednesday)
- Realtor.com Weekly Housing Market Recap (Wednesday)
- Freddie Mac Primary Mortgage Market Survey (Thursday)
- U.S. Department of Labor's Unemployment Insurance Weekly Claims Report (Thursday)
- U.S. Senate Committee on Banking, Housing, and Urban Affairs Hearing: The Semiannual Monetary Policy Report to the Congress (Thursday)
- U.S. House Committee on Financial Services Subcommittee on Oversight and Investigations: Virtual Hearing—CDBG Disaster Recovery: States, Cities, and Denials of Funding (Thursday)
- Black Knight weekly forbearance data (Friday)