What’s Ahead For Mortgage Rates This Week – January 25, 2021

January 25, 2021 by

What's Ahead For Mortgage Rates This Week - January 25, 2021Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, along with Commerce Department readings on housing starts and building permits issued. The National Association of Realtors® reported on sales of previously-owned homes; weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders’ Housing Market Index Falls in January

Homebuilder confidence in housing market conditions fell three points to an index reading of 83 in January. The National Association of Home Builders Housing Market Index expected a reading of 85 for January as compared to December’s index reading of 86. Increasing covid-19 cases and rising materials costs caused builder confidence to fall as builder concerns rose.

The NAHB Housing Market Index remained strong as any reading over 50 indicates positive builder sentiment toward housing markets. Component readings for January’s Housing Market Index also fell; builder confidence in current market conditions fell two points to an index reading of 90. Homebuilder confidence in market conditions for the next six months also fell two points to 83. Builder confidence in buyer traffic in new housing developments dropped five points to an index reading of 68. Readings of more than 50 for buyer traffic were rare until the covid-19 pandemic started.

Conflicting factors impacted home builder confidence readings. Home sales rose as urban homeowners sought new and larger homes in the suburbs and rural areas, labor shortages, and rising materials expenses worried home builders.

Housing Starts and Building Permits Rose in December

The Commerce Department reported a seasonally-adjusted annual pace of 1.67 million housing starts as compared to November’s reading of 1.547 million starts. Building permits issued rose in December with 1.709 million permits issued annually as compared to November’s reading of 1.635 million housing starts.

The National Association of Realtors® reported 6.76 million sales of previously-owned homes sold as of December on a seasonally-adjusted annual basis. Home sales are increasing although demand exceeds available inventory and home prices continue to rise.

Mortgage Rates, Jobless Claims Lower

Mortgage rates fell last week with the average rate for 30-year fixed-rate mortgages two basis points lower on average at 2.77 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points lower. Rates for 5/1 adjustable rate mortgages averaged 2.80 percent and 32 basis points lower. 

First-time jobless claims fell to 900,000 claims filed as compared to the prior week’s reading of 926,000 new claims filed. Ongoing jobless claims were also lower last week with 5.05 million continued claims filed as compared to 5.18 million claims filed the previous week. 

What’s Ahead

This week’s scheduled economic reporting includes readings from Case-Shiller Home Price Indices, the FHFA House Price Index, and the Federal Reserve’s Statement from its Federal Open Market Committee. Monthly readings on new home sales and consumer sentiment will also be published. Weekly readings on mortgage rates and jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – January 4, 2021

January 4, 2021 by

What's Ahead For Mortgage Rates This Week - January 4, 2021Last week’s economic news included reports from Case-Shiller Home Price Indices and data on pending home sales. No weekly data on jobless claims were released due to the New Year holiday, but Freddie Mac did issue its weekly report on average mortgage rates.

Case-Shiller Reports Home Prices Reached 6-Year High In October

U.S. home prices reached their highest level in six years according to Case-Shiller’s National Home Price Index. Home prices rose by 8.40 percent year-over-year in October as compared to September’s home price growth reading of 7.00 percent. Demand for homes rose during the Covid pandemic as families moved from congested urban areas to less crowded suburbs and rural areas. Ongoing shortages of available homes fueled rising home prices as mortgage rates fell to record lows. 

Case-Shiller’s 20-City Home Price Index showed a 7.90 percent year-over-year growth rate in October as compared to September’s home price growth rate of 6.60 percent.  Phoenix, Arizona led the 20-City Index with a year-over-year home price growth rate of 12.70  percent. Seattle, Washington posted a year-over-year home price growth rate of 11.70 percent, and San Diego, California followed closely with a year-over-year home price growth rate of 11.60 percent.

Cities posting the lowest home price growth rates in October were New York, New York with 6.00 percent home price growth; Chicago, Illinois posted year-over-year home price growth of 6.30 percent and Las Vegas Nevada home prices grew by 6.40 percent year-over-year,

Analysts did not expect home price growth to slow any time soon. Relocation and the anticipated retreat of the pandemic as vaccines become available were expected to fuel home price growth as the economy improves.

Pending Home Sales Fall in November, Average Mortgage Rates Mixed

The National Association of Realtors® reported  -2.60 percent a drop in pending home sales in November; this was the third straight month of falling pending home sales. Pending home sales are sales for which purchase contracts are signed but have not closed.

Mortgage Rates Mixed

Freddie Mac reported mixed average mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose by one basis point to 2.67 percent; the average rate for 15-year fixed-rate mortgages dropped by two basis points to 2.17 percent and rates for 5/1 adjustable rate mortgages dropped by eight basis points to 2.71 percent on average. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, minutes from the Fed’s FOMC meeting, and payroll data for public and private-sector jobs. The national unemployment rate will also be released. Weekly readings on mortgage rates and jobless claims are also expected.

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What’s Ahead For Mortgage Rates This Week – December 21, 2020

December 21, 2020 by

What's Ahead For Mortgage Rates This Week - December 21, 2020Last week’s scheduled economic reporting included readings from the National Association of Home Builders and a statement from the Federal Reserve’s Federal Open Market Committee. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Builder Confidence Falls In December

Homebuilder confidence in market conditions for single-family dropped by four points in December to an index reading of 86.  December’s reading was the second-highest on record after November’s reading. Component readings of the Housing Market Index also dropped. Builder confidence in current market conditions fell to 92 as confidence in single-family home sales within the next six months fell to an index reading of 85. Homebuilder confidence in buyer traffic in new single-family developments dropped to 73; buyer traffic readings rarely exceeded 50 until recent months.

Regional Housing Market Index readings were also lower than in November. The Northeast, Midwest, and South reported readings three points lower than in November. The Western region’s reading dipped by two points month-over-month.

Fed Holds Key Rate Steady

The Federal Open Market Committee of the Federal Reserve announced no change to the current federal funds rate range of 0.00 to 0.25 percent. Citing severe economic challenges caused by the Covid-19 pandemic, the FOMC statement indicated that economic forecasts would be subject to the course of the virus and related impacts on public health, the economy, and labor markets.

The Committee stated its monetary policy would be flexible in response to the pandemic and the Federal Reserve’s dual mandate of achieving maximum employment and an inflation rate of two percent. The inflation rate has fallen short of the Fed’s objective of two percent; FOMC members amended the inflation rate goal to two percent or higher to compensate for the impact of repeated readings under the two percent mandate.

Mortgage Rates Hit Record Low; Jobless Claims Mixed

Freddie Mac reported new record lows for average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged four basis points lower at 2.67 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were five basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 885,000 first-time claims filed as compared to 862,000 new claims filed the prior week. 5.51 million ongoing jobless claims were filed; last week’s reading was lower than the prior week’s reading of 5.78 ongoing jobless claims filed.

What’s Ahead

This week’s scheduled economic news includes readings on sales of new and previously-owned homes, inflation, and consumer sentiment. Weekly reports on mortgage rates and jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – December 14, 2020

December 14, 2020 by

What's Ahead For Mortgage Rates This Week - December 14, 2020Last week’s scheduled economic reporting included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Rate Rises in November

Inflation rose by 0.20 percent in November according to the federal government, but this reading fell short of the Federal Reserve’s goal of achieving 2.00 percent inflation annually. November’s year-over-year inflation rate was 1.20 percent. October’s inflation reading was flat and analysts expected inflation to grow by 0.10 percent in November.

Core inflation, which excludes volatile food and fuel sectors, showed readings identical to the Consumer Price Index reading. November’s Core Consumer Price Index was impacted by lower food and fuel costs.

Supreme Court Hears Arguments in Shareholder Suit over Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac were put under the oversight of the Federal Housing Finance Agency after the Great Recession and resulting mortgage crisis. The Supreme Court heard oral arguments regarding shareholder assertions that oversight of Fannie Mae and Freddie Mac is unconstitutional.

Mortgage Rates Mixed as Jobless Claims Rise

Freddie Mac reported no change in average fixed mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.71 percent; the average rate for 15-year fixed-rate mortgages was also unchanged at 2.26 percent.  Rates for 5/1 adjustable rate mortgages averaged 2.79 percent and were seven basis points lower than in the prior week. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and  0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were higher last week with 853,000 new claims filed as compared to 716,000 first-time claims filed the prior week. Analysts expected 720,000 first-time claims last week. Ongoing jobless claims also rose with 5.76 million claims filed as compared to the prior week’s reading of 5.53 million continuing claims filed. Increasing numbers of coronavirus cases caused higher than expected layoffs last week.

The University of Michigan’s Consumer Sentiment Index rose in December to an index reading of 81.4. Analysts expected December’s reading to decrease to 75.5 based on November’s index reading of 76.9. As winter progresses and Covid-19 cases continue to rise, consumer sentiment toward economic conditions will likely decline.

What’s Ahead

This week’s scheduled economic readings include reports from the National Association of Home Builders on housing market conditions; the Commerce Department will release reports on housing starts and building permits issued. The Federal Reserve will issue its Federal Open Market Committee Statement and Fed Chair Jerome Powell is slated to give a post-meeting press conference.

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What’s Ahead For Mortgage Rates This Week – December 7, 2020

December 7, 2020 by

 

vLast week’s economic reports included pending home sales, construction spending, and labor-sector readings on job growth and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also published.

What's Ahead For Mortgage Rates This Week - December 7, 2020Last week’s economic reports included pending home sales, construction spending, and labor-sector readings on job growth and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also published.

 

Construction Spending Rises as Demand for Homes Increases

High demand for single-family homes drove construction spending up by 1.30 percent to a seasonally adjusted annual pace of $1.44 trillion in October. The Commerce Department adjusted September’s reading to -0.50 percent. Analysts said that spending for commercial construction was flat after three successive months of lower spending. Business closures and a growing trend for working from home softened demand for commercial developments.

Pending home sales dropped by -1.10 percent in October as compared to September’s decline of -2.00 percent. Declines in pending home sales resulted from seasonal slowing in housing markets and rising cases of the coronavirus. Rising home prices caused by high demand for homes also caused fewer pending home sales. Uncertain economic conditions and concerns about the pandemic also contributed to the slower pace of home sales.

Mortgage Rates and Jobless Claims Drop

Mortgage rates dropped to record lows as the average rate for 30-year fixed-rate mortgages dropped by one basis point to 2.71 percent; the average rate for 15-year fixed-rate mortgages dropped by two basis points to 2.26 percent. The average rate for 5/1 adjustable rate mortgages dropped 30 basis points to 2.86 percent. Discount points for 30-year fixed-rate mortgages averaged 0.70 percent; discount points for 15-year fixed-rate mortgages averaged 0.60 percent. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent; all average points readings were unchanged from the prior week.

Initial and continuing jobless claims were lower last week. Initial jobless claims fell to 712,000 claims filed as compared to the prior week’s reading of 781,000 first-time claims filed; analysts expected 780,000 initial claims to be filed. Ongoing jobless claims also fell last week with 5.52 million continuing claims filed as compared to 6.09 million ongoing claims filed in the prior week.

Public and Private-Sector Job Growth Falls in November

ADP reported 307,000 private-sector jobs added in November as compared to October’s reading of 404,000 jobs added. The government’s Non-Farm Payrolls report showed 245,000 public and private sector jobs added in November as compared to October’s reported 610,000 jobs added. The national unemployment rate fell to 6.70 percent in November from 6.90 percent reported in October. Lower rates of job growth coupled with a lower unemployment rate suggested that some workers left the jobs market.

What’s Ahead

This week’s scheduled economic reports include readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.

 

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What’s Ahead For Mortgage Rates This Week – November 16, 2020

November 16, 2020 by

What's Ahead For Mortgage Rates This Week - November 16, 2020Last week’s economic reporting included readings on inflation and consumer sentiment along with weekly readings on mortgage rates and jobless claims. Federal Reserve Chair Jerome Powell and Federal Reserve Board members addressed economic expectations resulting from the COVID-19.

Chair Powell said that there would be no quick fix for the economy and that the economy would suffer for four to six months until the pandemic slows. He also said that a COVID-19 vaccine would not be a panacea for the virus and said that “ the next few months could be challenging” as the virus spreads at a faster pace.

Inflation Stalls as Pandemic Progresses

The Commerce Department reported no growth in the Consumer Price Index and Core Consumer Price Index in October. The readings for both indices were identical with 0.00 percent growth, 0.10 percent growth expected, and September’s month-to-month growth of 0.20 percent. Medical experts predicted  that COVID-19 cases would surge as cooler weather arrived.

The cost of living rose from June to October, but this was a recovery from deep dips in consumer prices as the pandemic took hold. The year-over-year inflation rate slowed to 1.20 percent in October from September’s reading of  1.40 percent. Annual inflation was growing by 2.30 percent before the pandemic.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages increased by six basis points to 2.84 percent. The average rate for 15-year fixed-rate mortgages rose by two basis points to 2.34 percent and rates for 5/1 adjustable rate mortgages jumped by 22 basis points to 3.11 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.40 percent.

First-time jobless claims fell last week to 709,000 filings. Analysts expected 731,000 new jobless claims based on the prior week’s reading of 751,000 initial jobless claims filed. Ongoing jobless claims were also lower last week with 6.79 million continuing claims filed. as compared to the prior week’s reading of 7.22 million ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index posted a lower reading of 77.0 in November as compared to October’s index reading of 81.6 percent and the expected reading of 82.3. The dip in the Consumer Sentiment Index reflected increased consumer concern as covid-19 cases rose,

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders Housing Market Index, Commerce Department reporting on housing starts, and building permits issued. Data on sales of previously-owned homes will also be reported.

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What’s Ahead For Mortgage Rates This Week – November 9, 2020

November 9, 2020 by

What's Ahead For Mortgage Rates This Week - November 9 , 2020Last week’s economic news included readings on construction spending, the Fed’s Federal Open Market Committee statement, and a press conference by Federal Reserve chairman Jerome Powell. Labor data on public and private sector jobs and the national unemployment rate were reported along with weekly readings on mortgage rates and jobless claims.

Residential Developments Lead September Construction Spending

High demand for homes continued to fuel home construction, but public and non-residential construction spending was slower according to the Commerce Department. Residential construction spending rose by 2.70 percent on a seasonally-adjusted annual basis while public construction spending decreased by -1.70 percent and non-residential construction spending dropped by -1.60 percent.

Changing priorities for home buyers including accommodations for work-from-home spaces and moving away from congested urban areas drove demand for  single-family homes. Commercial and public construction was sidelined as concerns over municipal spending and less revenue sidelined business and public construction spending. A new wave of COVID-19 cases also dampened commercial and public construction plans.

FOMC Statement and Fed Chair’s Press Conference

The Federal Open Market Committee of the Federal Reserve said it would leave the target Federal Funds range unchanged at 0.00 to 0.25 percent to promote access to business and personal credit. Factors contributing to the Committee’s decision included observations that demand for goods and services decreased and lower oil prices held down inflation. Committee members expected the spread of COVID-19 to impact the economy, employment, and inflation in the near term. The virus is expected to pose serious risks to economic forecasts over the medium term.

Fed Chair Jerome Powell said that the economy continued to recover from its low in the second quarter, but the pace of economic improvement has since slowed. Travel and hospitality sectors were hard-hit due to requirements for social distancing and wearing masks; Chair Powell emphasized that following public health guidelines was the only way that the COVID-19 virus could be controlled.

Mortgage Rates Mixed as Jobless Claims Fall

Freddie Mac reported mixed movement for average mortgage rates with rates for 30-year fixed-rate mortgages three basis points lower at 2.78 percent. Rates for 15-year fixed-rate mortgages averaged 2.32 percent and were unchanged. Rates for 5/1 adjustable rate mortgages averaged 2.89 percent and were one basis point higher. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and averaged 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 751,000 last week as compared to the prior week’s reading of 758,000 first-time claims filed. Continuing jobless claims were also lower last week with 7.38 million continuing claims filed as compared to the prior week’s reading of 7.81 million ongoing claims filed.

Public and Private  Sector Job Growth Slows in October

ADP reported 365,000 private-sector jobs added in October as compared to 753,000 jobs added in September. The Commerce Department reported 638,000 public and private sector jobs added in October as compared to the prior month’s reading of 672,000 public and private sector jobs added. The National Unemployment rate was also lower at 6.90 percent, which was lower than the expected reading of 7.60 percent and the previous month’s reading of 7.90 percent.

What’s Ahead

This week’s scheduled economic releases include readings on inflation and consumer sentiment. Weekly updates on mortgage rates and jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – September 28, 2020

September 28, 2020 by

 

What's Ahead For Mortgage Rates This Week - September 28, 2020Last week’s economic news included readings on new and existing home sales and Fed Chair Jerome Powell’s testimony on changing the Fed’s business loan policy. Weekly readings on mortgage rates and jobless claims were also released.

Sales of New and Pre-Owned Homes Rise In August

New homes sold at a seasonally-adjusted annual pace of 1.01 million sales; analysts expected the sales pace to fall to 900,000 sales from July’s reading of 965,000 new home sales. Homebuyers turned to new homes as the supply of pre-owned homes dwindled. Homeowners stayed put as fears over COVID-19 contagion limited sales.

Pre-owned homes sold at a seasonally-adjusted annual rate of six million homes as compared to the expected reading of 6.03 million sales and 5.86 million sales in July. Previously-owned home sales rose by 2.40 percent from July to August and were 10.50 percent higher year-over-year. The sales pace from July to August was the fastest since December 2006.

The median sales price of pre-owned homes rose to $310.600 in August and the average price for pre-owned homes was 11.40 percent higher year-over-year. Inventories of available pre-owned homes were lower than the six months supply considered average; there was a three months inventory of unsold pre-owned homes in August.

Mortgage Rates, Jobless Claims Mixed

Freddie Mac reported higher fixed mortgage rates last week as the average rate for 5/1 adjustable rate mortgages fell. 30-year fixed-rate mortgages rose three basis points on average to 2.90 percent. Rates for 15-year fixed-rate mortgages averaged 2.40 percent and were five basis points higher. The average rate for 5/1 adjustable rate mortgages was six basis points lower at 2.90 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 870,000 new claims filed from the prior week’s reading of 866.000 initial claims filed. Continuing jobless claims fell to 12.58 million ongoing claims from 12.78 million ongoing claims filed in the prior week

In other news, Fed Chair Jerome Powell testified before the House Financial Services Committee regarding the feasibility of the Federal Reserve offering smaller business loans for COVID-19 relief. The Fed’s current minimum loan amount is $250,000; Chairman Powell told the Committee that the Fed’s loan program had few requests for loans of less than $1 million. He also said that if the minimum loan amount was changed, the current lending program would have to be scrapped and restarted from scratch.

What’s Ahead

This week’s scheduled economic releases include Case-Shiller Home Price Indices,  pending home sales and reports on public and private-sector jobs, and the national unemployment rate.

 Last week’s economic news included readings on new and existing home sales and Fed Chair Jerome Powell’s
testimony on changing the Fed’s business loan policy. Weekly readings on mortgage rates and jobless claims were
also released.
Sales of New and Pre-Owned Homes Rise In August
New homes sold at a seasonally-adjusted annual pace of 1.01 million sales; analysts expected the sales pace to fall to
900,000 sales from July’s reading of 965,000 new home sales. Homebuyers turned to new homes as the supply of
pre-owned homes dwindled. Homeowners stayed put as fears over COVID-19 contagion limited sales.
Pre-owned homes sold at a seasonally-adjusted annual rate of six million homes as compared to the expected
reading of 6.03 million sales and 5.86 million sales in July. Previously-owned home sales rose by 2.40 percent from
July to August and were 10.50 percent higher year-over-year. The sales pace from July to August was the fastest
since December 2006.
The median sales price of pre-owned homes rose to $310.600 in August and the average price for pre-owned homes
was 11.40 percent higher year-over-year. Inventories of available pre-owned homes were lower than the six months
supply considered average; there was a three months inventory of unsold pre-owned homes in August.
Mortgage Rates, Jobless Claims Mixed
Freddie Mac reported higher fixed mortgage rates last week as the average rate for 5/1 adjustable rate mortgages
fell. 30-year fixed-rate mortgages rose three basis points on average to 2.90 percent. Rates for 15-year fixed-rate
mortgages averaged 2.40 percent and were five basis points higher. The average rate for 5/1 adjustable rate
mortgages was six basis points lower at 2.90 percent. Discount points averaged 0.80 percent for 30-year fixed-rate
mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages.
New jobless claims rose to 870,000 new claims filed from the prior week’s reading of 866.000 initial claims filed.
Continuing jobless claims fell to 12.58 million ongoing claims from 12.78 million ongoing claims filed in the prior
week
In other news, Fed Chair Jerome Powell testified before the House Financial Services Committee regarding the
feasibility of the Federal Reserve offering smaller business loans for COVID-19 relief. The Fed’s current minimum
loan amount is $250,000; Chairman Powell told the Committee that the Fed’s loan program had few requests for
loans of less than $1 million. He also said that if the minimum loan amount was changed, the current lending
program would have to be scrapped and restarted from scratch.
What’s Ahead
This week’s scheduled economic releases include Case-Shiller Home Price Indices, pending home sales and reports
on public and private-sector jobs, and the national unemployment 

 

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What’s Ahead For Mortgage Rates This Week – September 21, 2020

September 21, 2020 by

What's Ahead For Mortgage Rates This Week - September 21, 2020Last week’s economic news included readings on housing market conditions, housing starts, building permits issued, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

National Association of Home Builders Reports Record High Builder Confidence

The NAHB reported record high builder confidence in housing market conditions. The Housing Market Index had an index reading of 83 in September as compared to August’s reading of 78. Analysts said that this builder confidence reading was notable due to rising costs for building materials.

Component readings of the NAHB Housing Market Index also rose in September. Builder confidence in current single-family housing market conditions rose four points to an index reading of 88; builder confidence in housing market conditions in the next six months rose by six points to 84. Builder confidence in buyer traffic in single-family housing developments rose by nine points to a record index reading of 73.

Builder confidence readings over 50 reflect growing builder confidence in housing market conditions. March and April fell below 50 but rebounded as demand for larger suburban homes took hold as working from home increased. Record low mortgage rates are allowing home buyers to buy larger homes with more amenities. Robert Dietz, the chief economist for the NAHB, said that “Builders in other areas of the country have reported receiving calls from customers in high-density markets asking about relocating.”

Housing Starts and Building Permits Drop in August

The Commerce Department reported 1.42 million housing starts on a seasonally-adjusted basis in August as compared to July’s reading of 1.49 million housing starts. 1.47 million building permits were issued on a seasonally-adjusted annual basis;

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported mixed changes in mortgage rates; rates for 30-year fixed-rate mortgages averaged 2.87 percent and rose by one basis point. Rates for 15-year fixed-rate mortgages were two basis points lower on average at 2.35 percent. Rates for 5/1 adjustable rate mortgages averaged 2.96 percent and were 15 basis points lower. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 860,000 from the prior week’s reading of 893,000 new claims filed. Ongoing jobless claims also fell; 12.63 million were filed as compared to the prior week’s reading of 29.67 continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index also indicated economic growth with an index reading of 78.9 as compared to August’s reading of 74.1. Analysts expected am index reading of 75.9 for September.

What’s Ahead

This week’s scheduled economic readings include reports on new and existing home sales along with weekly reports on mortgage rates and jobless claims.

 

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What’s Ahead For Mortgage Rates This Week – September 14, 2020

September 14, 2020 by

What's Ahead For Mortgage Rates This Week - September 14, 2020Last week’s economic news included readings on inflation, job openings, and weekly reports on jobless claims and mortgage rates.

Inflation Rate Slows in August

After posting 0.60 percent growth for each month in June and July, the Consumer Price Index rose by 0.40 percent in August. These growth rates offset declines in inflation during the first three months of the COVID-19  pandemic. Used vehicle prices increased after deep discounts offered when the pandemic started; analysts said that rising prices for used vehicles offset losses in previous months and produced low inflation for August.

Core inflation, which excludes volatile food and energy sectors, mirrored results for the Consumer Price Index with 0.40 percent growth in August as compared to 0.60 percent growth in consumer prices in July. Prices for items in high demand in the first months of the pandemic have stabilized as panic buying of paper goods and meat has subsided. 

July Job Openings Increase; Labor Market Remains Uncertain

617,000 jobs were added in July as compared to 600,000 jobs added in June. Hiring fell in July to a pace of 5.80 million hires as compared to nearly seven million hires in June. Job openings rose by 617,000 job openings to 6.60 million openings in July. Analysts said that seven million jobs were added per month before the pandemic.

Mortgage Rates Fall to Record Low, Jobless Claims Hold Steady

Freddie Mac reported record low fixed mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.86 percent and were seven basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.37 percent and were five basis points lower. Rates for 5/1 adjustable rate mortgages rose by 11 basis points to an average of 3.11 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages.

Initial jobless claims were unchanged from last week’s reading of 884,000 new claims filed. Continuing jobless claims rose to 13.39 million from the prior week’s reading of 13.29 million ongoing claims filed. 

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market conditions, reports on housing starts, and building permits issued The University of Michigan will issue its Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims will also be released.

 

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