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What’s Ahead For Mortgage Rates This Week – October 3, 2016

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Last week’s economic releases included reports on new and pending home sales, S&P Case-Shiller Home Price Indices and regularly scheduled weekly reporting on mortgage rates and weekly jobless claims. Readings on consumer sentiment and confidence were also released.

New and Pending Home Sales Lower as Peak Sales Season Winds Down

August readings for new and pending home sales were lower than for July; analysts said that slim supplies of available homes and rising home prices contributed to slower home sales. Peak home sales typically occur during spring and summer. Homebuyers with school-aged children prefer to be settled into a new home when school starts in August and September.

According to the Commerce Department, new home sales achieved their second highest reading since the Great Recession. Although lower than July’s reading, August sales of new homes reached 609,000 on a seasonally-adjusted annual basis. Analysts expected a reading of 600,000 new home sales based on July’s reading of 659.000 new homes sold. August’s reading was 20.60 percent higher year-over-year. High demand for homes appears to be kicking home builders into higher gear as they strive to ease slim inventories of available homes.

The impact of short inventories of available homes was reflected in August’s reading for pending home sales. Home sales awaiting closing fell in August from July’s reading of +1.20 percent in July to 2.40 percent in August. The National Association of Realtors® said that home sales are declining due to very limited inventories of available homes. Rapidly rising home prices and strict mortgage qualification requirements also contributed to slipping sales. After home buyers sign a purchase contract, they are at the mercy of changing mortgage rates their ability to qualify for a mortgage. Pending home sales supply an indication of future closings and mortgage loans.

According to the S&P Case-Shiller 20-City Home Price Index for July, home price growth dipped from June’s seasonally adjusted annual rate of 5.10 percent to 5.00 percent. Slim inventories of homes for sale and high demand were again cited as primary reasons for slower home price growth. While demand is high, slim supplies of available homes can cause would-be buyers to postpone their home search until more homes are on the market.

Mortgage Rates Fall, New Jobless Claims Rise

Mortgage rates fell across the board last week according to Freddie Mac’s weekly survey of rates. The average rate for a 30-year fixed rate mortgage fell six basis points to 3.42 percent; the average rate for a 15-year fixed rate mortgage was four basis points lower at 2.72 percent. 5/1 adjustable rate mortgages had an average rate of 1.81 percent, which was one basis point lower than the previous week’s reading Discount points were also lower and averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 254,000 claims, but new claims were lower than the expected reading of 259,000 new claims which was based on the prior week’s reading of 251,000 new jobless claims. New jobless claims have stayed below 270,000 new claims for three months for the first time since 1973.

In prepared testimony before the Financial Services Committee, Federal Reserve Chair Janet Yellen discussed problems facing two major banks and said the Fed’s goal was managing its regulatory stance to support financial stability.

September’s Consumer Confidence Index reading rose to 104.1, which exceeded analysts’ estimated reading of 99.3 and August’s reading of 101.1.

What’s Next

Next week’s scheduled economic reports include readings on construction spending and several labor-related releases including ADP Payrolls, Non-Farm Payrolls and the National Unemployment Rates. Weekly reports on mortgage rates and new jobless claims are set for release as usual.

Eliminate These 5 Barriers To Saving For Your Down Payment This Month!

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Saving Up: 5 Barriers to Saving Money That You Can Eliminate in Just One MonthWith all the expenses that go into monthly living and the temptations that come along with life, saving money for the down payment on your new home can be quite a struggle for many people. If you’re having a hard time saving and are wondering what you can do to ensure a higher bank balance next month, here are a few things that may pose a risk to getting the home of your dreams.

Forgetting To Take Lunch

One of the things most likely to defeat your bank balance is the daily office trip to the deli or diner. Instead of opting for an easy but expensive $10.00 lunch, take a few minutes at the end of each day to put together a sandwich or salad so you don’t have to spend extra funds on your lunch break.

Relying On Cable Television

With all the available options for streaming services, many people are switching out their packages for something a lot more economical. Cable can easily add up to $100.00 a month to your expenses, but a streaming service may only be a fraction of the cost and will provide savings you’ll soon notice.

Splurging On Morning Coffee

Grabbing the familiar cup of joe on the way to the office is certainly a way to ease yourself into the day, but one coffee can add up to a huge expense by the end of the month. If this is a vice you crave, try taking your own coffee to work and opt for a treat once a week if you really can’t resist.

Impulse Buys At The Grocery Store

Food certainly counts as a necessity, but there are many things that end up in the grocery cart at the end of a shopping trip that aren’t really staple items. If your cart is filling up with chips and chocolate, you might want to stick to your list or review your cart before the final purchase.

Avoiding Your Budget

Unless you’re taking to a spreadsheet to balance out your expenses and earnings, you may not see any significant savings at the end of each month. Budgeting will give you a better idea of what you can and can’t afford consistently, so make sure you’re writing everything down.

The idea of cutting back on spending is rarely a popular one, but there are things you can do every day that will make for a better bank balance at the end of the month. If you’re looking for more tips on buying your own home, contact your trusted mortgage professional today!