Data Points
- U.S. crude oil prices have dropped almost 15% since August 26th
- The Consumer Price Index rose 0.4% in August, marking the third straight month of price increases
- Mortgage lenders issued $1.1 trillion in home loans from April to June this year
Top Three Market Headlines
Oil Prices Slide on Swelling Supplies: After trading in a fairly narrow band through the summer months, oil prices have slumped in recent weeks as supply outpaces demand. The price of a barrel of West Texas Intermediate crude oil ended last week at $37.32, down nearly 15% since August 26th. Amid a continued uncertain demand outlook, U.S. stockpiles have grown: the Energy Information Administration reported last week that U.S. crude inventories rose by over two million barrels for the week ended September 4, the first reported weekly increase in seven weeks.
Consumer Prices Continue Recovering: According to monthly inflation gauges released last week by the Bureau of Labor Statistics, prices of consumer goods and services continued to recover in August after having collapsed during the Covid-19-driven economic shutdown in March through May. Both the broad Consumer Price Index (CPI), as well as the core CPI reading, which excludes the volatile food and energy categories, rose by a seasonally-adjusted 0.4% in August, marking the third straight monthly increase. Despite the recent monthly uptick, however, on an annual basis the readings registered only 1.3% and 1.7%, respectively, below their pre-Covid-19 pace and short of the Federal Reserve’s target inflation rate of 2%.
Low Rates Spur Boom in Mortgage Activity: The home mortgage market recorded its most active quarter since 2000 this spring, according to mortgage data firm Black Knight Inc., as lenders issued $1.1 trillion in home loans between April and June. For context, lenders issued a total of $2.5 trillion in home loans in all of 2019. Mortgage refinancings, up 200% from a year ago, have been the leading contributor to the increase in volume, though record-low mortgage rates have incentivized both current and new homeowners. According to the Federal Home Loan Mortgage Corporation, the average rate for a 30-year, fixed-rate loan dipped below 3% in July for the first time, and last week reached a 50-year low of 2.86%.