With the red-hot job market, millions are moving to a new city this year. The cost of housing is a big consideration in deciding if taking that new job offer is really worth it. But also, a person’s commuting time is a growing consideration as people are focusing more on their quality of life.
The U. S. Census Bureau compiled the average daily round-trip commute times for almost 1,000 cities and the data is very alarming. The average American worker spends 52.2 minutes a day commuting to and from work, or 4.35 hours a week. This translates to an average of 408 days of one’s life commuting – and more in large cities.
This means that the time spent commuting is a major consideration on where to relocate and purchase the next home, the longer the commuting time – potentially, the less desirable a city or neighborhood becomes.
Educateddriver.org put together a great interactive map that you can checkout to determine your local commute time: Click HERE for the interactive map.
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 4.50 MBS) lost -16 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move slightly higher for the week.
Overview: We had strong GDP (4.2%), Inflation at 2.3% (Headline PCE), very strong Consumer data and very strong manufacturing data. All that positive data means growth and that is always something that will pressure long bonds and increase interest rates. While, Mexico and the U.S. appear to have a deal, the uncertainty of Canada joining in has provided some support for bonds which has diminished the downward pressure from the strong economic data.
PCE: The Fed’s preferred measure of inflation hit a six year high as the Core PCE number FINALLY hit 2.0% (the Fed’s target rate). The Headline PCE number continues to trend above 2.0% with a 2.3% vs est of 2.2% level. Spending picked up by 0.4% on a MOM basis and Income grew by 0.3%, both matched market expectations.
Manufacturing: The bell-weather Chicago PMI continues to deliver very robust readings. The August reading hit 63.6 vs est of 63.0. Any reading above 50 is good and readings above 60 are extremely positive for the economy.
Consumer Confidence: The August reading was very robust, coming in at 133.4 vs est of 126.5. This is the highest reading since 2000.
Consumer Sentiment: The August University of Michigan’s Index was revised to 96.2 from 95.3, a very strong reading.
GDP: The 2nd QTR GDP was revised upward from the originally reported 4.1% to 4.2%, the market was actually expecting a downward revision from 4.1% down to 4.0%, so this was a fairly nice beat to the upside.
The Talking Fed: The Senate confirmed Trump nominee Richard Clarida by a 69-26 vote as the Vice Chairman of the Federal Reserve. He replaced the void left by William Dudley. Clarida was a big fund manager at PIMCO at the time when PIMCO was the world’s largest bond trader.
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.