What’s Ahead For Mortgage Rates This Week – July 10, 2023

What's Ahead For Mortgage Rates This Week - July 10, 2023Last week’s scheduled economic reporting included readings on construction spending, June’s FOMC meeting minutes, and reports on jobs and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also released.

Construction Spending Increased in May

The Commerce Department reported spending for construction rose to 0.90 percent in May as compared to a month-to-month increase of 0.40 percent posted in April. The year-over-year reading showed $1.93 trillion in construction spending in May. April’s data was revised downward from the original reading of 1.20 percent growth to 0.40 percent growth in construction spending.

Readings for construction spending include all phases of government and private construction projects. When construction spending increases. It indicates overall growth in the economy. Year-over-year construction spending was 2.40 percent higher in May.

Private-Sector Job Growth Exceeds Expectations in June

The Commerce  Department reported the largest increase in private-sector job growth since July 2022. 497,000 jobs were added in June 2023, which surpassed analyst expectations of 220,000 jobs added. 267,000 jobs were reported in May’s reading. The increase in available jobs countered forecasts that the Federal Reserve’s recent series of interest rate hikes would slow inflation and dampen economic growth.

The national unemployment rate fell from 3.60 percent from 3.70 percent in May to 3.60 percent in June. In related news, weekly jobless claims rose to 248,000 claims from the previous week’s reading of 236,000 jobless claims filed. Analysts expected a reading of 220,000 claims filed.

Minutes of Federal Reserve Meeting: Fed Holds Federal Rate Range Steady in June

Members of the Federal Reserve’s Federal Open Market Committee voted to hold the Fed’s interest rate range at 5.00 percent to 5.25 percent. Committee members cited the tight labor market and current economic conditions that exceeded expectations. Fed Chair Jerome Powell said that the Fed would likely raise its rate range two more times during 2023. 

Freddie Mac reported higher average mortgage rates last week’s the rate for 30-year fixed-rate mortgages rose by 10 basis points to 6.81 percent. Rates for 15-year fixed-rate mortgages averaged 6.24 percent and 18 basis points higher.

What’s Ahead

This week’s scheduled economic reports include month-to-month and year-over-year readings on consumer inflation; the final monthly reading on consumer sentiment will be released along with weekly readings on mortgage rates and jobless claims.

 

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices UpApril readings for S&P Case-Shiller’s Housing Market Indices showed gains in home prices throughout the U.S. Rising prices were caused by shortages of previously-owned homes for sale and increasing buyer demand as the average 30-year mortgage rate exceeded six percent.  The southeastern region lost its top spot on S&P Case-Shiller’s 20-City Home Price Index as Chicago, Illinois, Atlanta, Georgia, and Tampa, Florida held the top three year-over-year home price growth rates for April.

Chicago, Illinois Breaks Southeast’s Lead on April Home Price Growth

The top three cities with the highest home price growth rates as reported in April’s   S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a  year-over-year home price gain of 4.10 percent;  Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent.  Tampa, Florida placed third in the 20-City Index with an average home price gain of 2.40 percent. All year-over-year readings for April home prices were seasonally adjusted.

Average home prices lagged in the West as the combined impact of high home prices and mortgage rates created affordability issues for would-be home buyers. Seattle, Washington saw average home prices drop by -12.40 percent year-over-year; San Francisco, California reported that year-over-year home prices declined by 11.10 percent in April. Home prices in Las Vegas, Nevada fell by 6.60 percent year-over-year.

Mortgage rates nearing 7 percent did not appear to impact home buyers to a great extent, but higher rates do increase the cost of home loans and monthly payments; current mortgage rates and rising home prices do not promote affordable opportunities for first-time and moderate-income home buyers.

FHFA House Price Index

In related news, the Federal Housing Finance Agency posted 0.50 percent month-to-month-home price growth in its  House Price Index for April. This index reports on home prices for homes sold by the Government Sponsored Enterprises Fannie Mae and Freddie Mac. These homes were acquired through foreclosure and were subject to original loan limits established by FHFA for mortgages acquired or guaranteed by Fannie Mae and Freddie Mac The GSEs’ loan limits cause a more moderate range of home price growth reported in  FHFA’s House Price Index as compared to data reported in the S&P Case-Shiller Home Price Indices.

What’s Ahead For Mortgage Rates This Week – June 26, 2023

What's Ahead For Mortgage Rates This Week - June 26, 2023Last week’s scheduled economic reports included readings on housing starts, existing home sales, and Federal  Reserve Chair Jerome Powell’s congressional testimony. Weekly readings on mortgage rates and jobless claims were also released.

National Home Builders Association Releases June Housing Market Index

U.S.  home builder confidence rose by five points to an index reading of 55 in June according to the National Association of Home Builders Housing Market Index. The June reading surpassed the expected reading of 51 and May’s housing market index reading of 50. Component readings for the Housing Market Index also rose as builder confidence in current market conditions rose five points and confidence in market conditions for the next six months rose six points.

NAHB said that a shortage of previously-owned homes for sale is driving sales of new homes and rising builder confidence. Many current homeowners refinanced to very low rates available during and immediately after the pandemic and are not inclined to refinance or buy new homes at current higher interest rates.

Mr. Robert Dietz, the chief economist for the NAHB, said: “A  bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year.” Mr. Dietz also noted that “with the Federal Reserve nearing the end of its tightening cycle, it’s good news for future market conditions in terms of mortgage rates and the cost of builder and developer loans.”

June’s reading was the sixth consecutive month showing increasing home builder confidence and the 11th month since builder sentiment moved into positive territory.

Mortgage Rates Fall

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by two basis points to 6.67 percent and rates for 15-year fixed-rate mortgages fell by seven basis points to an average rate of 6.03 percent.

Sales of previously-owned homes rose to a seasonally-adjusted annual rate of 4.30 million sales as compared to the expected reading of 4.25 million sales and April’s reading of April’  reading of 4.29 million sales.

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Indices, new and pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – June 19, 2023

What's Ahead For Mortgage Rates This Week - June 19, 2023Last week’s scheduled economic reports included readings on inflation, the Fed’s Federal Open Market Committee meeting, and Fed Chair Jerome Powell’s press conference. Weekly readings on mortgage rates and jobless claims were also published.

Fed Leaves Key Rate Range Unchanged

Federal Reserve policymakers left the Fed’s current interest rate range unchanged at 5.00 to 5.25 percent; the Fed decision was announced after a scheduled meeting of the Fed’s Open Market Committee ended on Wednesday. Factors contributing to the  FOMC policymakers’  decision included the cumulative effects of tightening monetary policy, lags between changing monetary policy and any impact on the economy, along with inflation and global and domestic economic developments.

The Committee reasserted its commitment to returning the inflation rate to its two-percent goal. Factors considered by FOMC Committee members include readings on labor markets, inflationary pressures and expectations, along with domestic and global economic and financial developments.

Inflation Pace Eases in May

The federal government reported slower inflation during May. The Consumer Price Index posted month-to-month inflationary growth of 0.10 percent from April to May; this reading matched expectations and was lower than April’s reading of 0.40 percent month-to-month. Core inflation, which excludes volatile food and fuel sectors, matched expectations and was unchanged from April’s month-to-month reading of 0.40 percent growth. Core inflation rose by 5.30 percent year-over-year and matched expectations but was lower than April’s year-over-year core inflation reading of 5.50 percent growth.

Mortgage Rates Fall; Weekly Jobless Claims Unchanged

Freddie Mac reported lower average mortgage rates as rates for 30-year fixed-rate mortgages fell by two basis points to 6.69 percent. Rates for 15-year fixed-rate mortgages rose by three basis points to an average rate of 6.10 percent. Jobless claims held steady with 262,000 new claims filed, which exceeded the expected reading of 245,000 initial claims and matched the previous week’s reading.

The University of  Michigan’s Consumer sentiment survey improved in June with an index reading of 63.9, which surpassed the expected reading of 60.8 and May’s index reading of 59.2.  Readings over 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on home builder confidence, housing starts,  and sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – June 12, 2023

What's Ahead For Mortgage Rates This Week - June 12, 2023

Last week’s scheduled economic news included results from Fannie Mae’s National Housing Survey and weekly readings on mortgage rates and jobless claims.

Fannie Mae Survey Shows Lower Home Buyer Confidence in May

Fannie Mae reported lower home buyer confidence in housing market conditions in May. High home prices and rising mortgage rates challenged prospective home buyers while providing favorable conditions for sellers. 65 percent of consumers surveyed for Fannie Mae’s Home Purchase Sentiment Index believed that it was a good time to sell their homes as compared to 62 percent of consumers surveyed in April. This was the highest consumer sentiment reading posted for the Home Purchase Sentiment Index since July 2022.

Mr. Mark Palim, a Fannie Mae Vice President and Deputy Chief Economist said: “Consumers also indicated that they didn’t expect affordability constraints to improve in the near future.”  81 percent of renters surveyed believed that it would be difficult to get a mortgage today.

Mortgage Rates Fall, Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week after three consecutive weeks of rising rates. The average rate for 30-year fixed-rate mortgages fell by eight basis points to 6.71 percent. Rates for 15-year fixed-rate mortgages averaged 6.07 percent and 11 basis points lower.

Jobless claims rose with 261,000 initial jobless claims filed as compared to the expected reading of 236,000 first-time claims filed and the previous week’s reading of 233,000 filings.

What’s Ahead

This week’s scheduled economic news includes The Fed’s Federal Open Market Committee Statement and Fed Chair Jerome Powell’s scheduled press conference. The University of Michigan will release its monthly reading on consumer sentiment and weekly readings on mortgage rates and first-time jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – May 30, 2023

What's Ahead For Mortgage Rates This Week - May 29, 2023Last week’s economic news included readings on new and pending home sales and inflation. The final monthly reading for May consumer sentiment was released along with weekly readings on mortgage rates and jobless claims.

Shortage of previously-owned homes for sale directs buyers to new homes

Homeowners weren’t in a hurry to sell their homes due to the low mortgage rates they obtained during the pandemic. Current mortgage rates are higher than pandemic-era rates, which influenced homeowners to stay in their homes and keep their lower existing mortgage rates. Home buyers turned to new home developments as an alternative to shopping for a home within the slim supply of available previously-owned homes.

The number of pending home sales was unchanged from March as compared to the expected reading of an 0.80 percent increase in pending sales and the March reading of a -5.20 percent decrease in pending home sales. Rising mortgage rates and concerns over the economy sidelined some sellers and would-be home buyers. Rising inflation continued to impact consumers as prices for goods and services rose by 0.40 percent in April as compared to the March increase of 0.10 percent. Year-over-year inflation rose to 4.40 percent in April as compared to the March year-over-year inflation reading of 4.20 percent. 

Consumer concerns about inflation and recession were supported by the government-sponsored mortgage organization  Fannie Mae, which predicted a recession in the second half of 2023.

Fed forecasts a recession and raises key interest rate range

The minutes of the Federal Reserve’s Federal Open Market Committee meeting revealed that policymakers were divided on the Federal Reserve’s monetary policy decision to raise its key interest-rate range to 5.00 percent and 5.25 percent. Some Fed members indicated that May’s interest rate hike may be the last for the near future as expectations of a recession rose. 

Mortgage rates and jobless claims rise

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by 18 basis points to 6.57 percent. The average rate for 15-year fixed-rate mortgages rose by 22 basis points to 5.97 percent.

229,000 new jobless claims were filed last week; this reading fell short of the expected reading of 245,000 initial claims filed and exceeded the prior week’s reading of 225,000 claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on public and private-sector jobs and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released. 

What’s Ahead For Mortgage Rates This Week – May 22, 2023

What's Ahead For Mortgage Rates This Week - May 22, 2023Last week’s economic reporting included readings on U.S. housing markets, sales of previously-owned homes, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: U.S. Home Builder Confidence Rises in May

The National Association of Home Builders reported a five-point gain in home builder confidence in current housing market conditions in May. The index reading for May rose to 50 in May as compared to April’s reading of 45. Analysts expected a reading of 45 for May. Readings above 50 indicate a majority of home builders are positive about current housing market conditions. Component readings of the home builder index also rose as the gauge for current market conditions rose by five points to 50; the reading for market conditions over the next six months rose by seven points and the index reading for buyer traffic increased by two points.

Builders surveyed indicated that homeowners aren’t motivated to sell as many of them bought or refinanced their homes during the pandemic when mortgage rates were very low. Aspiring homeowners are turning to new homes for more options as demand for homes continues to outpace the number of previously-owned homes available.

 Higher demand for homes caused developers to reduce incentives to homebuyers. Homebuilders offering price reductions on new homes fell from 30 percent in April to 27 percent in May.  NAHB said home price reductions averaged six percent of original home prices.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 6.39 percent and were four basis points higher than for the previous week. Rates for 15-year fixed-rate mortgages averaged 5.75 percent, which was unchanged from the prior week.

242,000 initial jobless claims were filed last week as compared to 255,000 expected claims and 264,000 first-time jobless claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reporting includes readings on new and pending home sales, minutes from the recent Federal Open Market Committee meeting, and the final consumer sentiment reading for May. Weekly readings on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – May 15, 2023

What's Ahead For Mortgage Rates This Week - May 15, 2023Last week’s scheduled economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Rises in April, Slower Pace Expected in Coming Months

The  U.S. Labor Department reported the month-to-month pace of inflation rose by 0.40 percent in April and matched analysts’ expectations. April’s reading surpassed the March reading of 0.10 percent month-to-month inflationary growth. Inflation rose by 4.90 percent year-over-year in April. Analysts expect inflationary growth to continue, but at a slower pace through 2023.

Core inflation, which excludes volatile food and fuel sectors, rose at a month-to-month pace of 0.40 percent in April, which matched expectations and the March reading. Year-over-year core inflation rose by 4.90 percent in April as compared to the expected reading of 5.00 percent and the March reading of 5.00 percent.

Mortgage Rates Fall as Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by four basis points to 6.35 percent. Rates for 15-year fixed-rate mortgages averaged one basis point lower at 5.75 percent. First-time jobless claims rose with 264,000 claims filed as compared to the expected reading of 245,000 claims and the prior week’s reading of 242,000 initial jobless claims filed.

As inflation slows, rapidly rising rental rates and home prices are also expected to increase at a slower pace. As homeownership becomes more affordable, fewer families will rely on rental homes. Less demand for rentals should help with easing very high rental rates seen in many metro areas. In general, more affordable housing choices could help ease housing challenges in areas with few affordable housing options.

The preliminary consumer sentiment survey for May reflects less consumer enthusiasm for current economic conditions. The initial index reading for May is 57.7, which fell short of the expected reading of 63.0 and April’s index reading of 63.5. May’s reading was the lowest since November 2022.

What’s Ahead

This week’s scheduled economic reporting includes readings on sales of previously-owned homes, housing market conditions, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – May 8, 2023

What's Ahead For Mortgage Rates This Week - May 8, 2023Last week’s economic news included reporting on construction spending, the Federal Reserve’s decision to raise its benchmark interest rate, and weekly readings on mortgage rates and jobless claims.

Construction Spending Increases in March

The Commerce Department reported that month-to-month construction spending rose by 0.30 percent and year-over-year construction spending increased by $1.83 trillion. Residential construction fell by -0.20 percent in March, which was the tenth consecutive monthly decline in residential construction spending. Non-residential construction spending rose by 0.70 percent in March for the ninth gain in the past 10 months.

Fed Raises Key Interest Rate Range

Federal Reserve policymakers raised the Fed’s key interest rate range by a quarter point to 5.00-5.25 percent at its Federal Open Market Committee meeting held on Tuesday and Wednesday. This was the tenth consecutive rate hike as the Fed continues efforts to control inflation.

Analysts noticed a subtle change in the tone of the Fed’s post-meeting statement and suggested that the less aggressive tone used in the post-meeting statement signaled a softer approach to raising the Fed’s benchmark rate. While some Fed policymakers recently suggested the possibility of a recession, Fed Chair Jerome Powell disagreed: “This is not my own most likely case.” Chair Powell also said that he expected economic growth in 2023 but at a slower pace.

Mortgage Rates Mixed, Jobless Claims Rise

Freddie Mac reported mixed movement of mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by four basis points to 6.39 percent. The average rate for 15-year fixed-rate mortgages rose by five basis points to 5.76  percent.

Initial jobless claims rose to 242,000 claims filed last week as compared to the prior week’s reading of  229,000 first-time claims filed. Continuing jobless claims fell with 1.81 million claims filed as compared to the prior week’s reading of 1.84 million claims filed.

What’s Ahead

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

What’s Ahead For Mortgage Rates This Week – May 1, 2023

What's Ahead For Mortgage Rates This Week - May 1, 2023Last week’s economic reporting included readings on home prices, sales of new homes, and pending home sales. Monthly and year-over-year readings for inflation were published along with weekly reports on mortgage rates and jobless claims.

February S&P Case-Shiller Housing Market Indices show slower home price growth

National home prices continued to rise in February, but at a slower pace according to S&P Case-Shiller home price indices. Month-to-month home prices rose by  0.40 percent in February and matched analysts’ expectations, but were lower than January’s reading of  2.50 percent home price growth.

S&P Case-Shiller’s 20-city home price index, which is frequently used by real estate professionals for tracking housing markets, rose by 0.10 percent month-to-month in February.  This was the first time home prices rose in eight months.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported an increase of  0.50 percent in home prices for homes owned and sold by Fannie Mae and Freddie Mac.Properties owned and sold by Fannie Mae and Freddie Mac are subject to loan limits and underwriting rules used by the two agencies.

In related news, the National Association of  Realtors® reported pending home sales fell by -5.20 percent in March compared to the expected reading of 0.50 percent growth and February’s reading of 0.80 percent in pending sales.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported mixed movement on mortgage rates as the average rate for 30-year fixed-rate mortgages rose by four basis points to 6.43 percent. Rates for 15-year fixed-rate mortgages fell by five basis points and averaged 5.71 percent.

Initial jobless claims fell to 230,000 claims compared to the expected reading of 246,000 claims and the previous week’s reading of 245,000 claims. Continuing jobless claims fell to 1.86 million filings from the prior week’s reading of 1.87 million ongoing claims.

The University of Michigan reported no change in consumer responses to its consumer sentiment survey for April. The index reading of 63.5 for March was unchanged in April and also matched analysts’ forecasts.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending, the Federal Open Market Committee’s scheduled statement, and Fed Chair Jerome Powell’s post-meeting press conference. Readings on public and private-sector employment and national unemployment are also scheduled for release.