01
Jun
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – June 1, 2015

Whats Ahead For Mortgage Rates This Week June 1 2015Last week’s economic reports included the Case-Shiller Home Price Indexes, FHFA’s House Price Index and Pending Home Sales from the Commerce Department. The details:

Home Prices Dip in March, Pending Home Sales Up

According to the Case-Shiller 20-City Housing Market Index, the national reading for average home prices dipped in March. The 20-City Index moved from February’s year-over-year home price growth of 4.20 percent to an average year-over-year home price growth rate of 4.10 percent in March. San Francisco, California reclaimed the top spot for home price growth of 10.30 percent year-over-year.

The Federal Housing Finance Agency reported results that mirrored the Case-Shiller report. The FHFA House Price Index tracks purchase-only transactions for homes connected with mortgages owned or backed by Fannie Mae and Freddie Mac. The March reading for home price growth slipped to 5.20 percent year-over-year as compared to February’s reading year-over-year growth rate of 5.50 percent. Lingering winter weather conditions were seen as a contributing factor to lagging home prices.

Meanwhile, the Commerce Department provided some good news for pending home sales. April’s pending sales reading increased to 3.40 percent from the March reading of 1.20 percent. Pending home sales are considered an indicator of future closings and suggest that the peak home selling and buying season is gaining momentum.

Sales of new homes in April brought spring home sales to their highest level in seven years. New home sales rose to an annual rate of 517,000 homes sold in April as compared to expected sales of 490,000 new homes sold and March’s reading of 484,000 new homes sold. The Midwest led the charge where new home sales surged by 36.80 percent. The latest readings for pending and new home sales suggest that 2015 can expect a healthy sales activity during the spring and summer.

Mortgage Rates, Weekly Jobless Claims Rise

Average mortgage rates rose last week according to Freddie Mac. The rate for a 30-year fixed rate mortgage rose by three basis points to 3.87 percent; discount points dropped from 0.70 percent to 0.60 percent. The average rate for a 15-year fixed rate mortgage rose by six basis points to 3.11 percent with discount points lower at 0.50 percent than the previous week’s average of 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by two basis points to 2.90 percent. Discount points were unchanged at 0.50 percent.

Weekly jobless claims rose to 282,000 new claims filed as compared to expectations of 270,000 new claims and the prior week’s reading of 275,000 new claims filed. In spite of the higher reading for new jobless claims, analysts said that layoffs are few and far between. New jobless claims hit their highest level in five weeks, but remain close to a 15-year low. The four-week rolling average of jobless claims increased by 5000 new claims to a reading of 271,500 new jobless claims filed. The four-week average is considered a more reliable source for tracking unemployment trends as it evens out highs and lows that occur in weekly readings.

What’s Ahead

This week’s economic reports include Construction spending and several labor-related news topics including Non-Farm Payrolls, the National Unemployment Rate and Average Hourly Earnings. Analysts expect improving labor conditions to further bolster housing markets.

26
May
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – May 26, 2015

Whats Ahead For Mortgage Rates This Week May 26 2015Last week’s economic reports included several readings related to housing The Wells Fargo/National Association of Home Builders Housing Market Index, the Commerce Department’s releases on Housing Starts and Building Permits, and the National Association of Realtors® report on Existing Home Sales supplied mixed news on recent developments in housing. Freddie Mac and the Labor Department released their usual reports on mortgage rates and weekly jobless claims. The details:

NAHB: Builder Confidence Slips, But Remains Positive

The Wells Fargo/ National Association of Home Builders (NAHB) released its Housing Market Index report for April. Although April’s reading was two points lower at 54, any reading over 50 indicates that more builders consider housing market conditions positive than not. April’s reading on builder confidence was the 11th consecutive index reading over 50.

According to NAHB, builder confidence in present housing market conditions dropped by two points to a reading of 59, while builder confidence in market conditions over the next six months rose one point to 64. Builder expectations for buyer foot traffic dropped by one point to 39. The lower readings for buyer traffic could be related to more home shoppers starting their home search online.

Building Permits, Housing Starts Show Improvement

The Commerce Department reported that building permits for April were higher at 1.14 million as compared to the March reading of 944,000 permits issued in March. Analysts expected a reading of 1.03 million permits issued, This was the highest reading for building permits since mid-2008.

Housing starts rose by a noteworthy 20 percent to a reading of 1.14 million in April, but analysts cautioned that this reading was inconsistent with the more moderate pace of improvement in overall housing markets. The Commerce Department reported that starts of single family homes rose by 17.60 percent to a reading of 666,000 starts. This was the highest rate of single-family starts since early 2008, but analysts noted that April’s high reading for housing starts could reflect delayed starts that were impacted by winter weather.

Existing Home Sales Fall Due to Rising Home Prices

The National Association of Realtors® reported that sales of previously owned homes dropped as home prices increased. A tight supply of available homes and higher home prices slowed the sales pace of existing home sales. April sales of existing homes fell from the March level of 5.21 million sales to 5.04 million sales; analysts had forecasted a higher sales volume of 5.24 million existing homes sold.

Rising home prices pose challenges to first-time and moderate income home buyers, and strict mortgage standards can make it tough for those with less than stellar credit scores to qualify for mortgages. Rising home prices are good news for homeowners as bidding wars have been reported in high-demand areas.

Mortgage Rates Lower, Jobless Claims Up

Freddie Mac reported that average mortgage rates were slightly lower. Mortgage rates for a 30-year fixed rate mortgage dropped by one basis point to 3.84 percent. Discount points rose from 0.60 to 0.70 percent. Mortgage rates for a 15-year fixed rate mortgage averaged 3.05 percent with average discount points of 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was one basis point lower at 2.88 percent; discount points were unchanged at 0.50 percent.

Weekly jobless claims rose to 274,000 new claims filed. This reading exceeded expectations of 269,000 new claims and the prior week’s reading of 264,000 new claims. Analysts said that although this was a four-week high for new unemployment claims, layoff s remain low. Year-over-year, new jobless claims were 16 percent lower. New jobless claims remain close to a 15-year low and layoffs hit their lowest level on record. This news could build prospective home buyer confidence as job security plays a major rrole in most decisions to buy a home.

What’s Ahead

This week’s housing related reports include the S&P Case-Shiller 10 and 20-City Home Price Indexes and the FHFA Home Price Index. New and Pending Home Sales reports and the usual mortgage rates and weekly jobless claims reports are also scheduled.

18
May
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – May 18, 2015

Whats Ahead For Mortgage Rates This Week May 18 2015Last week’s economic reports included data from the Federal Reserve on student loan debt, job openings and retail sales. Weekly jobless claims and Freddie Mac’s survey of average mortgage rates were released as usual on Thursday. A report on consumer sentiment wrapped up the week’s scheduled economic new.

Federal Reserve: Student Loan Borrowers Struggle with Payments 

In two reports issued by the New York and St. Louis branches of the Federal Reserve, researchers found that high numbers of student loan borrowers are behind in making payments. According to the New York Fed, 11.10 percent of student loan borrowers were 90 or more days past due on their payments during the first quarter of 2015.

This is a slight improvement over the fourth quarter of 2014, when 11.30 percent of student loan borrowers were 90 or more days behind with their payments. The Fed notes that these percentages do not include borrowers who are behind on payments but who are not required to make payments due to forbearance or other approved payment deferrals. 

The burden of student loan debt is a serious consideration for the housing sector, as student loan debt can keep would-be buyers from qualifying for mortgages needed to buy homes. Worse, delinquency on student loans can damage borrowers’ credit and create further obstacles to getting a mortgage.

Job Openings, Retail Sales Lower

The Labor Department reported that job openings fell to 4.99 million in March as compared to February’s reading of 5.14 million job openings. March job openings increased by 19 percent year-over-year. There were about 1.72 job seekers for each job opening in March, which is lower than the reading of 1.77 job seekers per job when the recession started in December 2007.

Retail sales were unchanged in April against an expected increase of 0.10 percent and the March reading of 1.10 percent. Retail sales without the automotive sector expanded by 0.10 percent against expectations of 0.40 percent growth and March growth of 0.70 percent. Increasing fuel prices and skepticism over economic conditions likely contributed to slack retail sales.

Mortgage Rates Mixed, Jobless Claims Lower

Weekly jobless claims provided some good news as they came in at 264,000 new claims against expectations of 275,000 new claims and the prior week’s reading of 265,000 new jobless claims. This was the third consecutive week that new jobless claims were less than 270,000; this has not occurred since 1975.

Freddie Mac reported that average rates for fixed rate mortgages rose, while the average rate for a 5/1 adjustable rate mortgage ticked downward by one basis point. The average rate for a 30-year fixed rate mortgage rose by five basis points to 3.85 percent. The average rate for a 15-year fixed rate mortgage also increased by five basis points to 3.07 percent. Discount points averaged 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

Consumer sentiment as reported by the University of Michigan dropped to a seven month low of 88.6 as compared to April’s reading of 95.9 and an expected reading of 94.9. Consumers are concerned about the economy and their personal finances. The reading for consumer sentiment prior to the recession averaged 86.9 over the year prior to the recession. Economists cited weak wage growth and rising fuel prices as contributing causes of consumer uncertainty.

What’s Ahead

This week’s scheduled economic news includes a number of housing-related reports. The NAHB Home Builders Housing Market Index, The National Association of Realtors® Existing Home Sales report, Housing Starts and Building Permits and the minutes of the Fed’s last FOMC meeting are set for release. Freddie Mac mortgage rates and Weekly Jobless Claims will be released as usual on Thursday.