What’s Ahead For Mortgage Rates This Week – September 18, 2023

What's Ahead For Mortgage Rates This Week - September 18, 2023The previous week offered a blend of economic updates, encompassing data on inflation trends, the pulse of consumer sentiment, and the weekly oscillations in mortgage rates and unemployment claims.

August Sees a Slight Upward Trend in Inflation

The latest data on monthly inflation was made public on September 13th, revealing that core inflation in August experienced a jump of 0.3 percent over its July reading. This number is a tad above the anticipated 0.2 percent and also overshadows July’s reading, which was set at 0.2 percent relative to the preceding month. Drawing from the Consumer Price Index, August witnessed a year-over-year inflation of 3.7 percent.

In a broader perspective, the inflation rate observed a 2.4 percent increase in the past quarter when compared to the same timeframe a year ago. This is a downward shift from the 5.0 percent recorded in the previous quarter and marks the most modest inflation rate since March of 2021. As September progresses, all attention will turn to the Federal Reserve’s impending meeting. Given that the current inflation is above the Fed’s target of 2.0 percent, speculations are circulating about whether an interest rate rise is on the horizon or if the existing rate adjustments will be given more time to work.

A Shift in Mortgage Rates and Employment Dynamics

The current 30-year fixed mortgage rate hovers around 7.51 percent, one of the highest rates seen in two decades. This is an upward jump from August, where the rates averaged at 7.18 percent. This trend is impacting potential homeowners. Meanwhile, the 15-year fixed mortgage rate stands close to 6.51 percent, mirroring August’s average, which rounded off at 6.55 percent.

Comparing the current mortgage figures to those of the previous week, there’s been a marginal decline in the 30-year fixed rate from 7.55 percent to 7.51 percent. The 15-year fixed rate remains relatively stable at 6.51 percent, with the past week’s average being 6.52 percent. These rising interest rates seem to be impacting in the broader economy, with a projected 6.4 million individuals unemployed, translating to a 3.8 percent rate. The US Department of Labor’s Bureau of Labor and Statistics pinpointed 1.8 million claims for unemployment benefits in August.

Consumer Sentiment: A Mild Dip

The University of Michigan released its consumer sentiment report for the month, showing a slight drop in consumer optimism. While August’s index stood at 69.5, September witnessed a dip, bringing it down to 67.7.

This dip implies that despite the decreasing inflation rates, there remains a cloud of uncertainty amongst consumers. This could be attributed to potential interest rate hikes and a subtle slowing down of the job market. The prevailing mood is still optimistic, but the trend is shifting.

Looking Forward

The next week promises updates on mortgage rates, while September 20th is the Federal Reserve’s next meeting. The focal point for many will be the Fed’s decision on the interest rates—whether they opt for another raise or choose to hold them steady for the upcoming period.

What’s Ahead For Mortgage Rates This Week – September 11, 2023

What's Ahead For Mortgage Rates This Week - September 11, 2023Last week’s scheduled economic reporting was limited due to the U.S. Labor Day holiday on Monday. The Federal Reserve released its Beige Book report and weekly readings on mortgage rates and jobless claims were also published.

Federal Reserve Releases Beige Book Report

The Beige Book report is a summary of information supplied to Federal Reserve policymakers by their business and professional contacts. Highlights of September’s Beige Book report included:

  • Accelerated leisure spending by consumers boosted economic growth during July and August.
  • Non-essential retail sales slowed, but the economy was boosted by a final stage of post-COVID-19 pent-up demand.
  • Prices for consumer goods fell faster than in many other sectors.
  • Auto sales rose due to better inventories available to consumers but increased sales were not connected with rising consumer demand for vehicles.
  • Rising business costs reduced profit margins.

The Beige Book report is published eight times a year before scheduled meetings of the Federal Reserve’s Federal Open Market Committee.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week; rates for 30-year fixed-rate mortgages averaged 7.12 percent and were six basis points lower than in the previous week. Rates for 15-year fixed-rate mortgages were three basis points lower and averaged 6.52 percent.

Initial jobless claims were lower with 216,000 first-time claims filed as compared to the prior week’s reading of 229,000 initial jobless claims filed. Analysts expected a reading of 230,000 new jobless claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on inflation, U.S. retail sales, and the preliminary monthly report on consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – August 14, 2023

What's Ahead For Mortgage Rates This Week - August 14, 2023Last week’s economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Holds Steady in July

Month-to-month inflation rose at a pace of 0.20 percent in July and met analysts’ expectations. There was no change in the pace of month-to-month inflation from June’s reading of 0.20 percent growth. The Consumer Price Index also reported that year-over-year inflation reached 9.10 percent, which was the highest reading since reaching a 40-year high in mid-2022.

Core inflation, which excludes volatile food and fuel prices, was unchanged from June’s month-to-month pace of 0.20 percent growth. July’s month-to-month reading matched analysts’ expectations. Year-over-year core inflation dipped slightly to 4.70 percent in July as compared to June’s reading of 4.80 percent year-over-year inflation.

Federal Reserve leaders said that they would continue monitoring domestic and global economic developments along with financial and economic data before determining whether or not to raise the Fed’s key interest rate range.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates for the third consecutive week. The average rate for a 30-year fixed-rate mortgage approached seven percent and rose by six basis points to 6.96 percent. Rates for 15-year fixed-rate mortgages rose by nine basis points to 6.34 percent.

248,000 initial jobless claims were filed last week, which surpassed expectations of 231,000 new claims filed and the previous week’s reading of 227,000 first-tine jobless claims filed.

University of Michigan Consumer Sentiment Survey

In other news, the University of Michigan released its monthly preliminary reading on U.S. consumer sentiment.

Consumer sentiment rose to an index reading of 72.0 in August as compared to the July reading of 71.6.  The majority of.consumers surveyed indicated that the economy improved in the three months leading up to the survey., Component readings included consumer sentiment index readings for current economic conditions and economic conditions within the next six months. The survey reading for consumer sentiment about economic conditions over the next six months fell to an index reading of  67.3 from the July reading of 68.3 Readings over 50 indicate that most consumers are confident about current economic conditions.

Joanne Hsu, the University of Michigan’s director of consumer surveys, said: “…In general, consumers perceived few differences in the economic environment from last month, but they saw substantial improvement relative to just three months ago.”

What’s Ahead

This week’s scheduled economic reporting includes reading on housing starts and building permits issued, the minutes of the Federal Reserve’s recent meeting of its Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims. 

What’s Ahead For Mortgage Rates This Week – July 31, 2023

What's Ahead For Mortgage Rates This Week - July 31, 2023Last week’s economic reporting included readings on the Fed’s interest rate decision, S&P Case-Shiller’s Home Price Indices, sales of new homes, and pending home sales. Weekly readings on mortgage rates and jobless claims were also released.

The Federal Reserve raised its target interest rate range to 5.25 to 5.50 percent; this announcement signaled that rates for home loans and unsecured credit would also rise.

S&P Case-Shiller Reports Slower Home Price Growth  in May

Average  U.S. home prices fell in May according to the S&P Case-Shiller 20-City Home Price Index. Home prices were -1.70 percent lower as compared to an expected dip of -1.90 percent and April’s reading of -1.70 percent. The top three cities reporting the highest pace of year-over-year home price growth were Chicago, Illinois with home price growth of 4.60 percent; Cleveland Ohio, where home prices grew by 3.90 percent, and New York City, where home prices rose by 3.50 percent.

Sales of previously owned homes fell due to high demand and slim supplies of homes for sale. Homeowners stayed on the sidelines while waiting for lower mortgage rates, but prospective buyers didn’t seem discouraged by rising rates, which recently approached 7 percent.

Craig J. Lazzara, managing director at S&P Case-Shiller Indices, said that the rally in U.S. home prices continued in May.

New home sales fell to a seasonally adjusted annual pace of 697,000 sales in June. Analysts estimated a pace of 725,000 sales and May’s reading showed a pace of 715,000 new home sales. Higher home prices in popular metro areas and rising mortgage rates created affordability challenges for first-time and moderate-income home buyers.

In related news, the FHFA Home Price Index reported that home price growth for homes owned and sold by Fannie Mae and Freddie Mac rose by 0.70 percent in May and was unchanged from April’s pace of home price growth. The FHFA reported year-over-year home price growth of 2.80 percent.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher mortgage rates for the fourth consecutive week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 6.81 percent. The average rate for 15-year fixed-rate mortgages was five basis points higher at 6.11 percent.

First-time jobless claims fell to 221,000 claims as compared to the previous week’s reading of 228,000 claims filed.

What’s Ahead

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

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.

 

What’s Ahead For Mortgage Rates This Week – Juy 3, 2023

What's Ahead For Mortgage Rates This Week - Juy 3, 2023Last week’s scheduled economic news includes readings on inflation, new home sales, pending home sales, and consumer sentiment. Federal Reserve Chair Jerome Powell spoke at a banking conference in Spain. Weekly reports on mortgage rates and jobless claims were also released.

New Home Sales Rise as Pending Home Sales Fall

May readings for new and pending home sales showed mixed results for May. 763,000 new home sales were expected on a seasonally-adjusted annual basis. Analysts expected a reading of 675,000 sales based on April’s year-over-year reading of 680,000 new home sales. May’s increase in new home sales was the largest since  February 2022.

New home sales increased for the third consecutive month. The supply of new homes for sale fell 11.80 percent between April and May to a 7-month supply of new homes available. Sales were strongest in the Northeast and West.

Pending home sales fell by -2.70 percent in May.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose by four basis points to 6.71 percent; the average rate for 15-year fixed-rate mortgages rose by three basis points to 6.06 percent.

Federal Reserve Chair Jerome Powell spoke at a banking conference in Spain. He discussed the U.S. economy and how the Fed addressed the financial downturn after the Great Recession and discussed current economic trends including the impact of higher mortgage rates on the housing sector and low unemployment.

Chair Powell also outlined the Fed’s goal of reducing inflation to 2.00 percent a year; it presently runs near 4.00 percent. Mr. Powell cited headwinds to lowering inflation including tighter credit requirements for individuals and businesses. Mr. Powell cautioned that further tightening may result from bank stresses that occurred in March.

June’s consumer sentiment index reading was nearly unchanged with an index reading of 64 for June as compared to May’s reading of 63.99. Index readings over 50 indicate that most consumers are confident about current economic conditions.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, public and private sector employment, and minutes of June’s Federal Open Market Committee meeting. Weekly reports on mortgage rates and jobless claims will also be released. 

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.