16
Aug
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – August 16, 2021

What's Ahead For Mortgage Rates This Week - August 16, 2021Last week’s economic reporting included readings on job openings, inflation, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Job Openings Rise as Inflation Rate Falls

The Labor Department reported a record number of job openings for the fourth consecutive month in June. Job openings rose to 10.1 million available jobs from May’s reading of 9.5 million job openings. Analysts expected job openings to decrease to 9.1 million jobs in June. 

Analysts said that previous headwinds to hiring including generous unemployment benefits and childcare issues may be easing. Workers took advantage of the rising demand for employees to negotiate higher wages and switch jobs for better offers. 

The Consumer Price Index fell by 0.40 percent in July to 0.50 percent as compared to June’s reading of 0.90 percent. The pace of year-over-year inflation remained at 5.40 percent  Core inflation, which excludes volatile food and fuel sectors, fell to 0.30 percent from 0.90 percent. July’s reading showed the impact of food and gas prices on inflation in recent months.

Mortgage Rates Rise, Jobless Claims and Consumer Sentiment Index Fall

Average mortgage rates rose last week as the rate for 30-year fixed-rate mortgages rose by 10 basis points to 2.87 percent. Rates for 15-year fixed-rate mortgages averaged 2.15 percent and were five basis points higher; rates for 5/1 adjustable rate mortgages averaged four basis points higher at 2.44 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. 

Initial jobless claims fell to 375,000 new claims filed as compared to the prior week’s reading of 387,000 first-time claims filed. Continuing jobless claims also fell; 2.87 million ongoing claims were filed last week as compared to the prior week’s reading of 2.98 million continuing jobless claims filed.

The University of Michigan reported its lowest reading for consumer sentiment since 2011. The preliminary reading for August fell to an index reading of 70.2 in August as compared to July’s reading of 81.2. Analysts expected an index reading of 81.3 for August, but rising covid 19 cases attributed to the highly contagious Delta form of the virus tanked consumer sentiment as mask requirements and social distancing guidelines re-emerged in some areas.

What’s Ahead

This week’s scheduled economic releases include readings from the National Association of Home Builders on housing markets, government readings on housing starts, and building permits issued. Retail sales will also be reported.

09
Aug
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – August 9, 2021

What's Ahead For Mortgage Rates This Week - August 9, 2021Last week’s economic reporting included readings on construction spending, consumer sentiment, labor sector reports on public and private sector jobs, and national unemployment. Weekly readings for mortgage rates and jobless claims were also released.

Residential Sector Drove June Construction Spending

Construction spending rose by 0.10 percent in June according to the Commerce Department. Analysts expected spending to increase by 0.50 percent, but builders spent less on public sector and non-residential projects. Spending for all construction spending rose at a year-over-year pace of $1.55 trillion. Residential construction rose by 1.10 percent in June, but public-sector spending fell by -1.20 percent and nonresidential construction spending fell by 0.70 percent. Year-over-year residential construction spending rose by 28.80 percent in June; nonresidential construction spending was 6.60 percent lower year-over-year.

Demand for homes continued to exceed the supply of available homes. Builders took advantage of lower lumber prices to ramp up construction, but shortages of affordable entry-level homes continued to challenge first-time and moderate-income home buyers. Although the covid pandemic continued to increase demand for homes, some buyers left the market due to high home prices and few options for available homes. Cash buyers and bidding wars in popular metro areas continued to drive up home prices.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by three basis points to 2.77 percent. The average rate for 15-year fixed-rate mortgages was unchanged at 2.10 percent; Rates for 5/1 adjustable rate mortgages averaged 2.40 percent and were five basis points lower. Discount points averaged 0.60 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 385,000 initial claims filed from the previous week’s reading of 399,000 new claims filed. Ongoing jobless claims were also lower with 2.93 million continuing claims filed as compared to 3.30 million ongoing claims filed in the previous week.

Low Unemployment Rate Suggests Continued Economic Recovery

Public and private sector jobs showed mixed results in July. ADP reported 330,000 private-sector jobs added in July as compared to 680,000 private-sector jobs added in June. The Labor Department reported 943,000 public and private-sector jobs added in July as compared to its June reading of 938,000 jobs added. The national unemployment rate fell to 5.40 percent in July as compared to June’s reading of 5.90 percent. Analysts expected an unemployment rate of 5.70 percent in July. 

What’s  Ahead

This week’s scheduled economic readings include reporting on job openings, inflation, and the University of Michigan’s initial consumer sentiment index for August. Weekly readings on mortgage rates and jobless claims will also be published.

02
Aug
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – August 2, 2021

What's Ahead For Mortgage Rates This Week - August 2, 2021Last week’s economic reporting included readings on home prices, new and pending home sales, and the post-meeting statement of the Fed’s Federal Open Market Committee. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller Home Price Indices: Home Price Growth Breaks Records for Second Consecutive Month

National home prices grew by 16.60 percent year-over-year in May according to S&P Case-Shiller’s National Home Price Index. April’s reading reported year-over-year home price growth of 14.80 percent. Home price growth broke records for the second month in a row in May. S&P Case-Shiller’s 20-City Home Price Index reported top home price growth in Phoenix, Arizona, Seattle, Washington, and San Diego, California again held the top three positions for US home price growth.

Home price growth exceeded expectations in the months since the covid pandemic arose as homeowners and homebuyers sought to relocate to less populated areas. Demand for homes continued to exceed inventories of homes for sale; this trend has driven home prices beyond the reach of many first-time and moderate-income buyers.  While affordability issues won’t be solved overnight, some slowing in home prices growth suggested that the national housing boom was easing as demand for homes slowed. Affordability became an obstacle for homebuyers who could not compete with rapidly escalating home prices, high demand for homes, and buyers prepared to make cash offers.

New and Pending Home Sales Fall

Rapidly rising home prices and few choices among available homes caused new home sales and pending home sales to fall in June. Homebuyers were frustrated with low inventories of homes and high home prices. Pending home sales fell by 1.90 percent in June; analysts expected an increase of 0.50 percent for pending home sales. Pending home sales in May rose by 8.30 percent.

June sales of new homes fell to a year-over-year pace of  676,000 sales as compared to May’s reading of 724,000 sales of new homes. Analysts expected a year-over-year sales pace of 795,000 new homes sold.  This was the lowest pace for sales of new homes since the onset of the pandemic.

Mortgage Rates, Jobless Claims Mixed

Freddie Mac reported mixed changes in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by two basis points to 2.80 percent, but the average rate for 15-year fixed-rate mortgages fell by two basis points to 2.10 percent. The average rate for 5/1 adjustable rate mortgages fell by four basis points to 2.45 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 400,000 first-time claims filed as compared to the previous week’s reading of 424,000 claims filed. Continuing jobless claims rose to 3.27 million ongoing claims filed last week as compared to 3.26 million ongoing jobless claims filed in the previous week.

The Federal Open Market Committee of the Federal Reserve announced that it did not raise the Federal Reserve’s key target interest rate range of 0.00 to 0.25 percent.

The University of Michigan’s Consumer Sentiment Index for July was released with an index reading of 81.2; a reading of 80.5 was expected based on June’s index reading of 80.8.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending and labor sector readings on jobs growth and national unemployment. Weekly reporting on mortgage rates and jobless claims will also be released.