Rate Update

Mortgage rates ended the week slightly lower last week as weak economic data and continued low inflation kept investor demand high for US Treasury bonds. 10-year note yields hit the lowest level in more than 16 months as global demand for long-term financial assets rose and the Federal Reserve prepares to buy Treasuries to lower borrowing costs. Jobless Claims rose to 500,000 in the week ended August 14, the highest level since November 2009. The Federal Reserve Bank of Philadelphia’s manufacturing index turned negative in August, signaling contraction for the first time in a year. Slower economic growth typically leads to less inflationary pressure, which is positive for mortgage rates. Currently, the 30-Year Fixed is at 4.000% (4.148% APR) and the 15-Year Fixed is at 3.625% (3.872% APR). Home sales in California were down 19.9% in July. San Luis Obispo County home sales were only slightly better, down nearly 19% from the month prior. State home prices were down 0.7% from June, while SLO County saw prices fall 2.6%. We will see more housing data this week with Existing Home Sales  released on Tuesday and Hew Home Sales coming out on Wednesday.