What’s Ahead For Mortgage Rates This Week – May 6th, 2019

What’s Ahead For Mortgage Rates This Week – May 6th, 2019Last week’s economic news brought good news to U.S. consumers on several fronts. Mortgage rates fell and national unemployment fell to its lowest rate in 50 years. Inflation slowed and the Federal Reserve held its target federal funds rate steady.

Freddie Mac analysts credited strong labor markets, high consumer confidence and falling mortgage rates as factors setting the stage for more home sales.

Pending Home Sales Rise as Construction Spending Falls

The National Association of Realtors® reported higher pending home sales in March; home sales under contract but not completed rose 3.89 percent in March as compared to February’s negative reading of -1.00 percent growth. Pending home sales provide a gauge for completed sales and mortgage loan volume.

Increasing home sales will help balance a lop-sided housing market fueled by an acute shortage of homes for sale and rapidly rising home prices that provided prospective home buyers with few options. High demand for homes drove prices up as buyers competed for available homes in popular metro areas.

Real estate pros repeatedly say building more homes is necessary for bringing housing markets back into balance, but construction spending was -0.90 percent lower in March. Analysts expected spending to dip -0.40 percent; February’s reading showed an increase of 0.70 percent in construction spending; Builders face ongoing headwinds including shortages of buildable lots and higher materials prices.

Mortgage Rates Fall as Fed Holds Key Rate Steady

The Federal Reserve did not raise its current federal funds rate range of 2.25 to 2.50 percent and inflation is growing slower than expected. These factors and low unemployment boosted consumer confidence in April; more home buyers were expected to enter the housing market as mortgage rates fell last week.

Freddie Mac reported that the average rate for 30-year fixed rate mortgages fell six basis points to 4.14 percent; the average rate for 15-year fixed rate mortgage was four basis points lower at 3.60 percent. Rates for 5/1 adjustable rate mortgages averaged nine basis points lower at 3.68 percent.

Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Labor Sector: Lowest Unemployment Rate in 50 Years

National Unemployment fell to 3.60 percent for the first time since 1969; this reading was lower than the expected reading of 3,70 percent the March reading of 3.80 percent. Public and private sector payrolls grew in April.

ADP reported 275,000 new private sector jobs in April; the Bureau of Labor Statistics reported 263,000 more public and private-sector jobs; this exceeded expectations of 213,000 jobs added and the reading of 189,000 public and private sector jobs added in March. First-time jobless claims were unchanged from the prior week’s reading of 230,000 first-time claims filed.

Consumer confidence rose to an index reading of 129.20 in April; analysts expected a reading of 126.90 percent based on the March index reading of 124.20.

Whats Ahead

This week’s scheduled economic news includes readings on inflation, job openings and weekly readings on first-time jobless claims and mortgage rates.

Last week’s economic news brought good news to U.S. consumers on several fronts. Mortgage rates fell and national unemployment fell to its lowest rate in 50 years. Inflation slowed and the Federal Reserve held its target federal funds rate steady. Freddie Mac analysts credited strong labor markets, high consumer confidence and falling mortgage rates as factors setting the stage for more home sales.

 

Pending Home Sales Rise as Construction Spending Falls

The National Association of Realtors® reported higher pending home sales in March; home sales under contract but not completed rose 3.89 percent in March as compared to February’s negative reading of -1.00 percent growth. Pending home sales provide a gauge for completed sales and mortgage loan volume.

 

Increasing home sales will help balance a lop-sided housing market fueled by an acute shortage of homes for sale and rapidly rising home prices that provided prospective home buyers with few options. High demand for homes drove prices up as buyers competed for available homes in popular metro areas.

 

Real estate pros repeatedly say building more homes is necessary for bringing housing markets back into balance, but construction spending was -0.90 percent lower in March. Analysts expected spending to dip -0.40 percent; February’s reading showed an increase of 0.70 percent in construction spending; Builders face ongoing headwinds including shortages of buildable lots and higher materials prices.

 

Mortgage Rates Fall as Fed Holds Key Rate Steady

The Federal Reserve did not raise its current federal funds rate range of 2.25 to 2.50 percent and inflation is growing slower than expected. These factors and low unemployment boosted consumer confidence in April; more home buyers were expected to enter the housing market as mortgage rates fell last week.

 

Freddie Mac reported that the average rate for 30-year fixed rate mortgages fell six basis points to 4.14 percent; the average rate for 15-year fixed rate mortgage was four basis points lower at 3.60 percent. Rates for 5/1 adjustable rate mortgages averaged nine basis points lower at 3.68 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

 

Labor Sector: Lowest Unemployment Rate in 50 Years

National Unemployment fell to 3.60 percent for the first time since 1969; this reading was lower than the expected reading of 3,70 percent the March reading of 3.80 percent. Public and private sector payrolls grew in April. ADP reported 275,000 new private sector jobs in April; the Bureau of Labor Statistics reported 263,000 more public and private-sector jobs; this exceeded expectations of 213,000 jobs added and the reading of 189,000 public and private sector jobs added in March. First-time jobless claims were unchanged from the prior week’s reading of 230,000 first-time claims filed.

 

Consumer confidence rose to an index reading of 129.20 in April; analysts expected a reading of 126.90 percent based on the March index reading of 124.20.

 

 

 

 

 

 

 

 

 

 

What’s Ahead

This week’s scheduled economic news includes readings on inflation, job openings and weekly readings on first-time jobless claims and mortgage rates.

What’s Ahead For Mortgage Rates This Week – April 29th, 2019

What’s Ahead For Mortgage Rates This Week – April 29th, 2019

Last week’s economic reporting included readings on sales of new and pre-owned homes; weekly reports on mortgage rates and new jobless claims were also released along with a report on consumer sentiment.

Sales of New Homes Hit 16-Month High

The Commerce Department reported that deep discounts offered by home builders boosted sales of new single-family homes to 692,000 sales on a seasonally-adjusted annual basis.

March sales exceeded February’s reading by 4.50 percent and exceeded the expected sales pace of 656,000 sales. The average price of new single family homes fell to $302,700 in March; this was 9.70 percent lower year-over-year.

Real estate pros reported higher inventory of new homes for sale with a six-month supply of homes for sale in March. A six-month supply of available homes indicates that housing markets were evenly balanced between homes for sale and prospective buyers.

Previously-owned homes sold at a seasonally-adjusted annual pace of 5.21 million sales in March. The National Association of Realtors® said that sales of pre-owned homes were 5.90 percent lower than the sales pace of 5.48 million pre owned homes posted for February and that March sales missed expectations of 5.35 million sales.

Sales were likely impacted by higher average sales price for pre-owned homes; the average selling price for pre-owned homes was $259,400, which was 3.80 percent higher year-over-year. Higher home prices challenge first-time and moderate income home buyers; this could explain the slower sales pace for pre-owned homes in March.

Mortgage Rates and New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed rate mortgages averaged 4.20 percent and were three basis points higher than for the prior week. Rates for 15-year fixed rate mortgages averaged two basis points higher at 3.64 percent; Rates for 5/1 adjustable rate mortgages fell one basis point and averaged 3.77 percent. Discount points for fixed rate mortgages averaged 0.50 percent and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims jumped to 230,000 new claims filed as compared to the prior week’s reading of 193,000 new claims filed. Analysts said that more first-time claims were likely related to the Easter holiday and spring breaks.

According to the Consumer Sentiment Index for April, consumer sentiment rose to an index reading of 97.20 percent as compared to an expected reading of 97.0 and March’s reading of 96.9.

Whats Ahead

This week’s scheduled economic news includes readings from Case-Shiller, and Commerce Department readings on construction spending and pending home sales. The Federal Open Market Committee of the Federal Reserve will issue its post-meeting statement and Fed Chair Jerome Powell will give a press conference. ADP and Non-Farm Payrolls reports will be released along with the national unemployment rate.

What’s Ahead For Mortgage Rates This Week – April 22nd, 2019

What’s Ahead For Mortgage Rates This Week – April 22nd, 2019Last week’s economic news included readings on home builder confidence in housing market conditions and Commerce Department reports on housing starts and building permits issued. Weekly readings on mortgage ratees and first-time jobless claims were also released.

NAHB Housing Market Index: Builder Confidence Rises One Point in April

Home Builder Confidence readings posted by the National Association of Home Builders held steady for April and rose one point overall. Component readings for the NAHB Housing Market Index were mixed; builder confidence in current housing market conditions rose one point to an index reading of 69, but builder confidence in housing market conditions in the next six months fell one point to 62.

Home builder confidence in potential buyer traffic rose three points to 47. NAHB Housing Market index readings above 50 indicate that most builders view market conditions as positive, but the reading for buyer traffic seldom rises above 50.

Housing Starts and Building Permits Issued Fall Short of Expectations in March

Commerce Department reports on housing starts and building permits issued in March were lower than in February and fell short of analyst expectations. Housing starts were reported at a seasonally adjusted annual pace of 1.139 million starts. Analysts expected housing starts at an annual rate of 1,225 billion starts based on February’s reading of 1.142 million starts.

Builders continued to experience headwinds including higher materials costs, shortages of buildable lots and a lack of skilled labor. Analysts cited disparities between new housing developments, which tend to favor luxury homes and the need for affordable housing.

Exclusionary zoning and neighborhood politics can block construction of affordable housing in desirable areas; legal and zoning constraints prevent builders from producing enough affordable homes to meet demand. Housing starts year-to-date were 9.70 percent lower than for the same period in 2018.

Fewer building permits were issued in March than in February. 1.269 million permits were issued on a seasonally adjusted annual basis as compared to expectations of 1.300 million permits issued and February’s reading of 1.291 million permits issued.

Mortgage Rates Rise as New Jobless Claims Fall

Mortgage rates were higher last week as average rates for fixed rate mortgages rose. 30-year mortgage rates averaged five basis points higher at 4.17 percent. Rates for 15-year fixed rate mortgages averaged two basis points higher at 3.62 percent.  

Mortgage rates for 5/1 adjustable rate mortgages averaged two basis points lower at 3.78 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent 5/1 adjustable rate mortgages.

First-time jobless claims fell by 5000 new claims to 192,000 initial claims; this was significantly lower than 204,000 new claims expected.

Whats Ahead

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