14
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 14, 2020

What's Ahead For Mortgage Rates This Week - December 14, 2020Last week’s scheduled economic reporting included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Rate Rises in November

Inflation rose by 0.20 percent in November according to the federal government, but this reading fell short of the Federal Reserve’s goal of achieving 2.00 percent inflation annually. November’s year-over-year inflation rate was 1.20 percent. October’s inflation reading was flat and analysts expected inflation to grow by 0.10 percent in November.

Core inflation, which excludes volatile food and fuel sectors, showed readings identical to the Consumer Price Index reading. November’s Core Consumer Price Index was impacted by lower food and fuel costs.

Supreme Court Hears Arguments in Shareholder Suit over Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac were put under the oversight of the Federal Housing Finance Agency after the Great Recession and resulting mortgage crisis. The Supreme Court heard oral arguments regarding shareholder assertions that oversight of Fannie Mae and Freddie Mac is unconstitutional.

Mortgage Rates Mixed as Jobless Claims Rise

Freddie Mac reported no change in average fixed mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.71 percent; the average rate for 15-year fixed-rate mortgages was also unchanged at 2.26 percent.  Rates for 5/1 adjustable rate mortgages averaged 2.79 percent and were seven basis points lower than in the prior week. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and  0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were higher last week with 853,000 new claims filed as compared to 716,000 first-time claims filed the prior week. Analysts expected 720,000 first-time claims last week. Ongoing jobless claims also rose with 5.76 million claims filed as compared to the prior week’s reading of 5.53 million continuing claims filed. Increasing numbers of coronavirus cases caused higher than expected layoffs last week.

The University of Michigan’s Consumer Sentiment Index rose in December to an index reading of 81.4. Analysts expected December’s reading to decrease to 75.5 based on November’s index reading of 76.9. As winter progresses and Covid-19 cases continue to rise, consumer sentiment toward economic conditions will likely decline.

What’s Ahead

This week’s scheduled economic readings include reports from the National Association of Home Builders on housing market conditions; the Commerce Department will release reports on housing starts and building permits issued. The Federal Reserve will issue its Federal Open Market Committee Statement and Fed Chair Jerome Powell is slated to give a post-meeting press conference.

16
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 16, 2020

What's Ahead For Mortgage Rates This Week - November 16, 2020Last week’s economic reporting included readings on inflation and consumer sentiment along with weekly readings on mortgage rates and jobless claims. Federal Reserve Chair Jerome Powell and Federal Reserve Board members addressed economic expectations resulting from the COVID-19.

Chair Powell said that there would be no quick fix for the economy and that the economy would suffer for four to six months until the pandemic slows. He also said that a COVID-19 vaccine would not be a panacea for the virus and said that “ the next few months could be challenging” as the virus spreads at a faster pace.

Inflation Stalls as Pandemic Progresses

The Commerce Department reported no growth in the Consumer Price Index and Core Consumer Price Index in October. The readings for both indices were identical with 0.00 percent growth, 0.10 percent growth expected, and September’s month-to-month growth of 0.20 percent. Medical experts predicted  that COVID-19 cases would surge as cooler weather arrived.

The cost of living rose from June to October, but this was a recovery from deep dips in consumer prices as the pandemic took hold. The year-over-year inflation rate slowed to 1.20 percent in October from September’s reading of  1.40 percent. Annual inflation was growing by 2.30 percent before the pandemic.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages increased by six basis points to 2.84 percent. The average rate for 15-year fixed-rate mortgages rose by two basis points to 2.34 percent and rates for 5/1 adjustable rate mortgages jumped by 22 basis points to 3.11 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.40 percent.

First-time jobless claims fell last week to 709,000 filings. Analysts expected 731,000 new jobless claims based on the prior week’s reading of 751,000 initial jobless claims filed. Ongoing jobless claims were also lower last week with 6.79 million continuing claims filed. as compared to the prior week’s reading of 7.22 million ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index posted a lower reading of 77.0 in November as compared to October’s index reading of 81.6 percent and the expected reading of 82.3. The dip in the Consumer Sentiment Index reflected increased consumer concern as covid-19 cases rose,

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders Housing Market Index, Commerce Department reporting on housing starts, and building permits issued. Data on sales of previously-owned homes will also be reported.

09
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 9, 2020

What's Ahead For Mortgage Rates This Week - November 9 , 2020Last week’s economic news included readings on construction spending, the Fed’s Federal Open Market Committee statement, and a press conference by Federal Reserve chairman Jerome Powell. Labor data on public and private sector jobs and the national unemployment rate were reported along with weekly readings on mortgage rates and jobless claims.

Residential Developments Lead September Construction Spending

High demand for homes continued to fuel home construction, but public and non-residential construction spending was slower according to the Commerce Department. Residential construction spending rose by 2.70 percent on a seasonally-adjusted annual basis while public construction spending decreased by -1.70 percent and non-residential construction spending dropped by -1.60 percent.

Changing priorities for home buyers including accommodations for work-from-home spaces and moving away from congested urban areas drove demand for  single-family homes. Commercial and public construction was sidelined as concerns over municipal spending and less revenue sidelined business and public construction spending. A new wave of COVID-19 cases also dampened commercial and public construction plans.

FOMC Statement and Fed Chair’s Press Conference

The Federal Open Market Committee of the Federal Reserve said it would leave the target Federal Funds range unchanged at 0.00 to 0.25 percent to promote access to business and personal credit. Factors contributing to the Committee’s decision included observations that demand for goods and services decreased and lower oil prices held down inflation. Committee members expected the spread of COVID-19 to impact the economy, employment, and inflation in the near term. The virus is expected to pose serious risks to economic forecasts over the medium term.

Fed Chair Jerome Powell said that the economy continued to recover from its low in the second quarter, but the pace of economic improvement has since slowed. Travel and hospitality sectors were hard-hit due to requirements for social distancing and wearing masks; Chair Powell emphasized that following public health guidelines was the only way that the COVID-19 virus could be controlled.

Mortgage Rates Mixed as Jobless Claims Fall

Freddie Mac reported mixed movement for average mortgage rates with rates for 30-year fixed-rate mortgages three basis points lower at 2.78 percent. Rates for 15-year fixed-rate mortgages averaged 2.32 percent and were unchanged. Rates for 5/1 adjustable rate mortgages averaged 2.89 percent and were one basis point higher. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and averaged 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 751,000 last week as compared to the prior week’s reading of 758,000 first-time claims filed. Continuing jobless claims were also lower last week with 7.38 million continuing claims filed as compared to the prior week’s reading of 7.81 million ongoing claims filed.

Public and Private  Sector Job Growth Slows in October

ADP reported 365,000 private-sector jobs added in October as compared to 753,000 jobs added in September. The Commerce Department reported 638,000 public and private sector jobs added in October as compared to the prior month’s reading of 672,000 public and private sector jobs added. The National Unemployment rate was also lower at 6.90 percent, which was lower than the expected reading of 7.60 percent and the previous month’s reading of 7.90 percent.

What’s Ahead

This week’s scheduled economic releases include readings on inflation and consumer sentiment. Weekly updates on mortgage rates and jobless claims will also be released.