Last Week in the News
U.S. mortgage applications rose 1.1% for the week ended July 6, the Mortgage Bankers Association reported July 11. Applications were 10.5% above their year-ago level.
Meanwhile, the National Association of Realtors (NAR) said on July 11 that it expects existing-home sales to rise to nearly 6.4 million units in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, NAR said.
As for new homes, NAR projected sales of 865,000 in 2007, and 878,000 next year, but the 2008 projection would still be down more than 20% compared with the nearly 1.1 million new homes sold in 2006.
Consumer borrowing rose at an annual rate of 6.4% in May, far above the small 1.1% gain in April and double what analysts had forecast, the Federal Reserve reported July 9. According to David Wyss, chief economist at Standard & Poor's, some of the credit card surge reflects the fact that tightening bank standards are making home equity loans harder to obtain and home values are not soaring as they did during the housing boom.
Addressing a National Bureau of Economic Research conference on July 10, Federal Reserve Chairman Ben Bernanke noted that Americans' expectations about inflation play an important role for Federal Reserve policy makers in their efforts to tame inflation. His talk dimmed hopes for a reduction in the Fed's key interest rate, which has held steady at 5.25% for just over a year.
This week look for updates on the Producer Price Index on July 17 and the Consumer Price Index on July 18.