Real Estate & Market Report: August 14, 2015 – Although it was a week of little economic news in the United States, China’s move to devalue their currency placed the stock market in turmoil for a couple of days.

• With the devaluation of the Yuan, that has the potential to significantly impact corporate profits for U.S. companies doing business in China.
• It makes it harder for the U.S. to compete against China prices thereforepossibly creating an economic slowdown in the U.S.
• Investor fears caused the Dow to decline over 200 points on Tuesday.
• Wednesday the market started off down just shy of an additional 200 points however through the trading day the markets recovered to finish almost flat.

The greatest benefactor of the worry on Wall Street is borrowers for mortgage loans.

• Given the fear in the markets many investors purchased bonds and treasuries as a hedge against the declining market.

Rates for mortgage loans declined approximately 1/8th of a percent.

• Next week the Mortgage Bankers Association application data should reflect a likely increase in activity.
• Applications for the week ending August 7th showed purchase applications declined 4.0 percent while refinances increased 3.0 percent.

Ironically if you listen to some of the presidential candidates you will hear that they are criticizing the Department of Labor’s statistics on unemployment.

• Whether their assertions on the inaccuracy of the numbers are correct, it is quite obvious that they are posturing for their presidential bid to garner votes.

The most recent data on first time jobless claims shows that the current pace remains at historically low levels.

• For the week ending August 8th claims remained well below the 300k benchmark down to 274k.

The retail sales report surprised many analysts by posting a 0.4 percent gain for the month of July.

• Recent data has been pointing to consumers keeping their money in their wallets despite that they have been able to enjoy significant savings at the gas pumps.
• There is high expectation that gas prices will continue to fall as the OPEC Nation’s continue to pump out as much oil as they possibly can flooding the market with more oil than is needed.

Next week’s potential market moving reports are:

• Monday August 17th – Housing Market Index
• Tuesday August 18th – Housing Starts
• Wednesday August 19th – MBA Applications, Consumer Price Index & FOMC Minutes
• Thursday August 20th – First Time Jobless Claims & Existing Home Sales

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (661) 505-4300.