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.

05
Mar
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 5th, 2018

Whats Ahead For Mortgage Rates This Week – March 5th 2018Last week’s economic releases included readings on new home sales, pending home sales and Case-Shiller Home Price Indices. Construction spending and consumer sentiment reports were also released, along with weekly readings on average mortgage rates and new jobless claims.

New Home Sales Drop in January

New home sales were reported at a seasonally-adjusted annual rate of 593,000 sales in January according to the Commerce Department. Analysts expected a rate of 693,000 sales based on December’s upwardly revised rate of 643,000 sales of new homes. January’s reading was 7.80 percent lower than for December; January’s reading was one percent lower than for January of 2017.

The average price of a new home was $323,000, which was 2.40 percent higher than for January 2017. The current supply of new homes for sale is 15 percent higher year-over-year, which is expected to ease low inventories of available homes.

Meanwhile, pending home sales were 4.70 percent lower in January than for December, which was unchanged as compared to November. Analysts said that sales activity, which is typically slow in January, was not likely a concern overall.

Case-Shiller Reports Higher Home Prices in December

Home prices were 6.30 percent higher year-over -year in December according to Case-Shiller’s 20-city home price index and were 0.60 percent higher month-to-month. The top three cities leading year-over-year home price growth were Seattle, Washington at 12.70 percent, Las Vegas, Nevada with 11.10 percent growth and San Francisco, California with 9.20 percent growth in home prices.  

None of the 20 cities in the index saw home prices fall in 2017 even after adjustments for inflation.

Construction spending was unchanged in January as compared to analyst estimates of 0.40 percent growth in spending. Builders cited concerns over higher materials prices and shortages of lots and skilled labor. Winter weather was also a factor in lower construction spending.

Mortgage Rates Rise New Jobless Claims Fall

Freddie Mac reported higher average rates for fixed rate mortgages last week; rates for 5/1 adjustable rate mortgages were lower on average. Mortgage rates for a 30-year fixed rate mortgage averaged three basis points higher at 4.43 percent. Rates for a 15-year fixed rate mortgage averaged 3.90 percent and were five basis points higher.

The average rate for a 5/1 mortgage was three basis points lower at 3.62 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Mortgage rates rose for the eighth consecutive week, which caused concerns about affordability for first time and moderate-income home buyers. Combined effects of rapidly rising home prices and higher mortgage rates may sideline buyers.

New jobless claims fell by 10,000 to 210,000 first-time claims filed last week. Analysts expected 226,000 new claims based on the prior week’s reading of 220,000 new claims filed. In other news, the University of Michigan reported a lower reading for consumer sentiment in February with an index reading of 99.7 against an expected reading of 100.0 and January’s reading 0f 99.9.

What‘s Ahead

This week’s scheduled economic news includes multiple readings from the labor sector along with weekly reports on mortgage rates and new jobless claims.

 

26
Feb
By support
Market Outlook

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

Whats Ahead For Mortgage Rates This Week – February 26th 2018Last week’s economic releases included minutes from the most recent FOMC meeting, a report on January sales of pre-owned homes and weekly readings on mortgage rates and new jobless claims.

FOMC Minutes: Economic Strength Hints at More Rate Hikes

Minutes of the January 30-31 meeting of the Fed’s Federal Open Market Committee indicated that most Committee members believe that inflation will reach the Fed’s goal of 2.00 percent. Members found that the economy was stronger since 2017 and expected “a gradual upward trajectory of the federal funds rate would be appropriate.”

While analysts expect three rate hikes in 2018, the FOMC voted to hold the federal funds rate at 1.25 to 1.50 percent. Most FOMC members expected that the goal of 2 percent inflation was within reach in 2018.

Analysts were not as confident about reaching to Fed’s inflation goal. Instead, the said that in response to tax cuts, the labor market could exceed full employment and lead to higher wages and surging inflation.

A minority of FOMC members said that inflation could fall short of the Fed’s goal as retailers would compete by lowering prices.

Existing Home Sales Drop in January

According to the National Association of Realtors®, sales of previously-owned homes dipped from a seasonally-adjusted annual rate of 5.56 million sales to 5.38 million sales in January. This reading was the lowest in more than three years; it could indicate that the shortage of homes for sale has reached critical mass.

Months of short supplies of homes for sale have caused rapidly rising home prices, buyer competition and fewer choices of homes for would-be buyers. Real estate pros have repeatedly said the only solution to shortages of available homes is that builders must build more homes but increasing materials costs and labor shortages have caused construction pace to lag demand for homes. Affordability continued to weigh on moderate-income and first-time buyers.

Mortgage Rates Rise for 7th Consecutive Week

Freddie Mac reported higher mortgage rates on average last week. The average rate for a 30-year fixed rate mortgage was two basis points higher at 4.40 percent; rates for a 15-year fixed rate mortgage averaged one basis point higher at 3.85 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points higher at 3.65 percent.

New jobless claims dropped by 7000 first-time claims and regained a 45-year low. 222,000 new claims were filed last week as compared to expectations of 229,000 new claims and 230,000 new claims filed the prior week. Real estate pros and analysts cite strong labor markets as driving housing markets and high demand for homes. Workers with job security and options for advancement in their careers are more likely to consider investing in a home than paying rising rents.

What‘s Ahead

This week’s scheduled economic releases include Case-Shiller Home Price Indices, readings on new and pending home sales and construction spending. Weekly readings on mortgage rates and new jobless claims will be released along with a report on consumer sentiment.