01
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 1, 2021

What's Ahead For Mortgage Rates This Week - June 1, 2021Last week’s economic reports included readings on home price growth, new and pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims were also released.

Case-Shiller Reports Highest Gains in Home Prices Since 2005

March home prices grew at a seasonally-adjusted annual rate of 13.20 percent according to S&P Case-Shiller’s National Home Price Index for March. National home prices gained 12.00 percent year-over-year in February; the corresponding 20-City Home Price Index reported that Phoenix, Arizona held the top spot for home price growth for the 22nd consecutive month; home prices rose by 20.00 percent year-over-year. San Diego, California followed with 19.10 percent growth in home prices, and Seattle, Washington posted year-over-year home price growth of 18.30 percent for third place in the 20-City Home Price Index.

All cities participating in the 20-City Index reported faster growth in March home prices than in February. Rapidly rising home prices pressed new home sales down from the March reading of 917,000 new homes sold to a seasonally-adjusted annual pace of 863,000 new homes sold in April. The inventory of new homes for sale dipped to a 3.80 month supply in April as compared to a 4.60 month supply of new homes available in March. Builders faced continuing obstacles including high materials and labor costs that reduced their ability to produce the volume of homes needed to meet ongoing demand.

Pending home sales were -4.40 percent lower in April as compared to expectations of a 1.00 percent increase in pending sales; Pending home sales rose by 1.70 percent in March. High competition for homes and fewer available homes along with higher prices sidelined prospective buyers as affordability concerns increased. 

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by five basis points to 2.95 percent. Rates for 15-year fixed-rate mortgages averaged 2.27 percent and were two basis points lower. Rates for 5/1 adjustable rate mortgages were unchanged at 2.59 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and  0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.

First-time jobless claims fell to 406,000 initial claims filed as compared to the previous week’s reading of 444,000 new claims filed. Continuing jobless claims fell to 3.64 million claims filed from the prior week’s reading of 3.74 million continuing jobless claims filed.

Inflation rose by 0.50 percent in April, which matched analysts’ expectations. Core inflation, which excludes food and fuel sectors, rose by 0.70 percent and exceeded expectations of 0.60 percent growth.in April. The March reading for core inflation showed 0.40 percent growth. The Federal Reserve has an annual goal of two percent inflation; current readings indicate that inflation may rise above the two percent benchmark if the current pace of inflation continues. 

What’s Next

This week’s scheduled economic news includes readings on construction spending and readings on public and private-sector jobs growth. Weekly reports on mortgage rates and jobless claims will also be published.

 

 

24
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 24, 2021

What's Ahead For Mortgage Rates This Week - May 24, 2021Last week’s economic reporting included readings from the National Association of Home Builders, data on sales of existing homes, and reports on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builder Confidence Unchanged in May

The National Association of Home Builders Housing Market Index reading for May was unchanged from April’s reading of 83. Readings higher than 50 indicate that most home builders were positive about housing market conditions.

Component readings for builder confidence in housing market conditions in May were mixed; builder confidence in current market conditions was unchanged with an index reading of 83; builder confidence in market conditions in the next six months rose one point to 81 and builder confidence in buyer traffic in new single-family housing developments dropped one point to 73. Readings for buyer traffic rarely exceeded 50 before the pandemic.

Robert Dietz, NAHB’s chief economist said that costs of land, labor, and building materials were expected to rise throughout 2021 and would drive home prices higher. Lower interest rates, shortages of pre-owned homes for sale, and interest in relocating to less congested suburban and rural areas continued to increase demand for single-family homes against severe shortages of homes for sale. Rapidly rising home prices squeezed first-time and moderate-income home buyers out of the market and caused some sales to fall through.

Sales of previously-owned homes fell in April and supported concerns about shortages of available homes. 5.85 million homes were sold on a seasonally adjusted annual basis, which was lower than the expected reading of 6.02 million sales and the March reading of 6.01 million sales of previously-owned homes. Rising home prices and short supplies of homes for sale continued to create high demand for homes.

Housing Starts Fall in April; Building Permits Issued Rise

The Commerce Department reported a sharp decrease in housing starts in April with 1.57 million starts on a seasonally-adjusted annual basis. March housing starts were revised downward to 1.73 million starts, but this did not affect April’s reading being the highest pace of housing starts since 2006. Housing starts fell in the Midwest and South and rose in the Northeast and West.

Building permits held steady in April at a seasonally-adjusted annual pace of 1.76 million permits issued. Analysts expected 1.77 million building permits issued.

Mortgage Rates Rise; Jobless Claims Mixed

Mortgage rates rose last week as rates for 30-year fixed-rate mortgages rose by six basis points to 3.00 percent on average. Rates for 15-year fixed-rate mortgages averaged 2.79 percent and were three basis points higher. Rates for 5/1 adjustable rate mortgages were unchanged at an average rate of 2.59 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 444,000 initial claims filed last week from the previous week’s reading of 478,000 new claims filed. Continuing jobless claims rose to 3.75 million claims filed as compared to the prior week’s reading of  3.64 million ongoing jobless claims filed.

What’s Ahead

This week’s economic reporting includes readings from Case-Shiller Home Price Indices, data on new and pending home sales, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims will also be released.

17
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 17, 2021

What's Ahead For Mortgage Rates This Week - May 17, 2021Last week’s economic reports included readings on inflation, core inflation, and the University of Michigan’s  Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also released.

April Inflation Rate Hits 13-Year High

The federal government’s Consumer Price Index rose by 0.80 percent in April as compared to the March reading of 0.60 percent. Analysts expected inflation to increase by 0.20 percent in April. Core inflation, which excludes volatile food and fuel sectors, rose by 0.90 percent in April. Analysts expected core inflation to grow by 0.30 percent in April which would have been unchanged from the March reading of 0.30 percent Core inflation rose month-to-month at the fastest pace in forty years and grew by three percent year-over-year, which was the highest growth rate since September 2008.

Consumer gas prices surpassed $3.00 per gallon for the first time since 2014; last week’s shutdown of Colonial Pipeline’s main transmission line was expected to drive gasoline prices higher. Prices of used cars and trucks rose 10 percent in April and contributed to a 21 percent increase in used vehicle prices year-over-year. Costs for shelter rose 2.10 percent year-over-year and were 0.0 percent higher month to month. Analysts noted that high inflation rates are caused in part by the low pace of inflation reported during the pandemic. Inflation Growth percentages are higher than they would have been if inflation had not slowed during the pandemic.

Mortgage Rates, Jobless Claims, and Consumer Sentiment Fall

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.94 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.26 percent and were four basis points lower; the average rate for 5/1 adjustable rate mortgages dropped by 11 basis points to 2.59 percent. Discount points averaged 0.70 percent, 0.60 percent, and 0.30 percent respectively.

First-time jobless claims were lower last week with 473,000 initial claims filed as compared to the prior week’s reading of 507,000 new jobless claims filed. Continuing jobless claims were also lower with 3.66 million ongoing claims filed; 3.70 million continuing jobless claims were filed in the prior week. The University of Michigan’s Consumer Sentiment Index reading was lower in May with a reading of  82.8 as compared to the expected reading of  90.1 and April’s index reading of 88.3.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing markets, data on sales of previously-owned homes,  and Commerce Department readings on housing starts and building permits issued. Minutes of the Fed’s most recent Federal Open Market Committee meeting will be released along with weekly readings on mortgage rates and jobless claims