09
Apr
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 9th, 2018

What’s Ahead For Mortgage Rates This Week – April 9th, 2018Last week’s economic reports included readings on construction spending, mortgage rates and weekly jobless claims. Other labor-related claims included ADP payrolls, Non-Farm Payrolls and the national unemployment rate.

Construction Spending Rises in February

Construction spending was higher in February according to the Commerce Department. Spending on building projects rose by 0.10 percent in February Reuters reported that construction spending rose 0.10 percent as compared to expectations of an 0.40 percent increase and January’s unchanged reading. Seasonal weather conditions typically cause lulls in building. Analysts said that residential construction spending increased by 0.10 percent to its highest level since January 2007.

Real estate analysts have consistently indicated that building more homes is the only solution to lingering shortages of available homes in the U.S. Recent news about tariffs on foreign building materials may cause builders to wait and see how tariffs will impact business before going all-out on building homes.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; the average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent.15-year fixed rate mortgage rates averaged 3.87 percent, which was three basis points lower than the prior week. Rates for a 5/1 adjustable rate mortgage averaged 3.62 percent and were four basis points lower than for the prior week. 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.

Weekly jobless claims rose to 242,000 new claims filed as compared to 225,000 new claims expected and 218,0000 claims filed the prior week.

Labor Reports Show Mixed Results

ADP reported fewer private-sector jobs created in March with 241,000 jobs created as compared to February’s reading of 246,000 new private-sector jobs. The Labor Department reported a sharp drop in Non-Farm payrolls, which measures public and private-sector job growth. 103,000 jobs were added in March as compared to February’s revised reading of 326,000 jobs added. Jobs added in March were at their lowest level since fall 2017.

Analysts put the low Non-Farm payrolls reading in perspective; on average 202,000 jobs were added monthly during the first quarter of 2018 and jobs growth was faster than during first quarters of 2016 and 2017. The national unemployment rate was unchanged at 4.10 percent; this was the lowest rate in 17 years. Low unemployment rates typically indicate few layoffs and suggest strong economic growth.

What‘s Ahead

This week’s scheduled economic releases include readings on inflation, core inflation and consumer sentiment. The Federal Open Market Committee of the Fed will release minutes from its last meeting. Weekly readings on mortgage rates and new jobless claims will also be released.

26
Mar
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 26th, 2018

What’s Ahead For Mortgage Rates This Week – March 26th, 2018Last week’s economic releases included readings on new and pre-owned home sales and the Federal Open Market Committee’s customary post meeting statement. Fed Chair Jerome Powell gave his first press conference as Chair of the Federal Reserve and FOMC. Weekly readings on mortgage rates and first-time jobless claims were also released.

February Sales of Pre-Owned Homes Exceed Expectations, New Home Sales Fall Short

Sales of previously-owned homes exceeded expectations at a seasonally-adjusted annual rate of 5.54 million sales. Analysts expected a rate of 5.40 million sales based on January’s reading of 5.38 million sales.

Lawrence Yun, National Association of Realtors® Chief Economist, said that low inventories of available homes continued to impact rising home prices. Mr. Yun said that he did not expect any let-up on home price growth. February’s inventory of available homes slipped to a 3.4 months supply; a six-months supply of homes for sale is considered average and an indication of healthy housing markets.

Mr. Yun said that he may adjust forecasts for home price growth. First-time buyers are being squeezed out of housing markets due to rapidly rising home prices. The average price for a home was $241,700 in February. First-time buyer participation dropped to 29 percent of buyers as compared to an average of approximately 40 percent.

Regional sales of pre-owned homes were mixed. Sales in the Northeast dipped 12.30 percent; Midwest sales dipped by 2.40 percent. The South posted 6.60 percent growth in home sales, and the West reported 11.40 percent growth in home sales year-over-year.

Sales of new homes dipped in February.to 618,000 sales as compared to expectations of 630,000 sales and January’s reading of 622,000 sales of new homes. Combined effects of seasonal weather and homebuyer concerns over rising mortgage rates and home prices likely contributed to the drop in new home sales.

FOMC Raises Key Rate, New Fed Chair Sees Stronger Economy

The Federal Reserve’s Federal Open Market Committee raised the target federal funds rate to a range of 1.50 -1.75 percent, a move that was widely expected. Fed Chair Jerome Powell indicated that the Fed would continue a modest pace of raising rates in 2018 but indicated a more aggressive pace for raising rates may be appropriate in 2019.

Federal Reserve analysts predicted eight rate hikes between 2018 and the end of 2020; this estimate includes that last three rate increases. Wednesday’s rate hike was the sixth quarter-point rate hike since December 2015.

Federal Reserve Chairman Jerome Powell gave his first press conference as Fed Chair after the FOMC post-meeting statement. He indicated he is not fearful of inflation overheating and said that he would protect recent tax cuts.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported that mortgage rates ticked up by one basis for all three types of mortgages it tracks. The average rate for a 30-year fixed rate mortgage was 4.45 percent; the rate for a 15-year fixed rate mortgage averaged 3.91 percent and the average rate for a 5/1 adjustable rate mortgage was 3.68 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 229,000 new claims filed as compared to an expected reading of 225,000 new claims and the prior week’s reading of 226,000 new jobless claims filed. Analysts noted that winter readings for jobless claims can be unpredictable and don’t indicate weakening job markets.

What‘s Ahead

This week’s scheduled economic releases include readings from Case-Shiller on home prices, readings on pending home sales and weekly reports on mortgage rates and new jobless claims.

19
Mar
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 19th, 2018

What’s Ahead For Mortgage Rates This Week – March 19th, 2018Last week’s economic news included readings From National Association of Home Builders, Commerce Department reports on housing starts and building permits issued Weekly readings on mortgage rates and new jobless claims were also released.

NAHB Posts 3rd Consecutive Decline in Builder Confidence

According to the National Association of Home Builders, builder confidence in housing market conditions dropped by one point in March to an index reading of 70. Three sub-categories of builder sentiment used to calculate the overall reading were either unchanged or lower than February readings. 

Confidence in current market conditions were unchanged at 72, Builder confidence in market conditions for the next six months fell two points to an index reading of 78. The index for buyer traffic in new housing developments dipped three points to 51. Any reading over 50 indicates positive builder sentiment.

Builders cited increased demand for homes as a positive influence on builder confidence, but recent decisions to impose tariffs on some building materials concerned builders, but pronounced shortages of new and pre-owned homes contributed to positive builder sentiment.

Mortgage applications for new homes were 4.60 percent higher year-over-year in February according to the Mortgage Bankers Association.

Housing Starts Lower in February

The Commerce Department reported an annual rate of 1.236 million housing starts in February; this was seven percent lower than January’s reading of 1.329 million starts. Analysts expected a reading of 1.25 million starts. Housing starts were higher in the Northeast regions, but the Midwest, South and Western regions reported fewer starts in February than for January.

Permits for building new homes slipped by 5.70 percent in February, but ups and downs in construction activity during winter months can cause volatility in readings for permits and housing construction.

Mortgage Rates Mixed, New Jobless Claims Dip

Freddie Mac reported lower fixed mortgage rates for the first time in 2018; the average rate for a 30-year fixed rate mortgage was two basis points lower at 4.44 percent, Rates for 15-year fixed rate mortgages averaged 3.90 percent, which was four basis points lower than for the prior week. Mortgage rates for a 5/1 adjustable rate mortgage averaged 3.67 percent, an increase of four basis points on average.

First time jobless claims dipped last week to 226,000 new claims. Analysts expected new claims to drop to 228,000 new claims based on the prior week’s reading of 230,000 new jobless claims. The week ended on a positive note with consumer sentiment rising from an index reading of 99.7 to 102 in March. The Consumer Sentiment Index is produced by the University of Michigan.

What‘s Ahead

This week’s scheduled economic reports include readings on sales of new and previously-owned homes; the Federal Open Market Committee of the Federal Reserve will issue its customary post-meeting statement, and Fed Chair Jerome Powell will give a press conference after the FOMC statement. Weekly readings on mortgage rates and new jobless claims will also be released.