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What’s Ahead For Mortgage Rates This Week – July 18, 2022

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What's Ahead For Mortgage Rates This Week - July 18, 2022Inflation dominated last week’s economic readings and predictions as it hit a year-over-year growth rate of  9.10 percent in July. Inflation reached its highest year-over-year growth rate since 1981. Gasoline prices eased somewhat, but not enough to provide relief against a backdrop of high housing and food prices. Low and moderate-income consumers were disproportionately impacted as rents rose beyond near-record inflation and home prices remained out of reach for many would-be home buyers.

Inflation Causing Hardship for Moderate-Income Consumers

Consumers faced with rapidly growing expenses turned to credit cards for purchasing food and household items; this trend suggests that as interest rates rise, more households could experience increasing financial stress as paying off consumer debt becomes more difficult.

The Consumer Price Index rose by 1.3 percent in June on a month-to-month basis; analysts expected a month-to-month reading of 1.1 percent inflationary growth based on May’s reading of 1.0 percent growth. The core Consumer Price Index, which excludes volatile food and fuel sectors, rose by 0.70 percent in June and exceeded analysts’ expected reading of 0.50 percent growth and May’s month-to-month reading of 0.60 percent growth.

Year-over-year inflation reached 9.10 percent in June and surpassed analysts’ expectations of 8.80 percent- year-over-year-inflationary growth and May’s year-over-year reading of 8.60 percent growth. Core inflation rose by 5.90 percent year-over-year in June and fell short of analysts’ forecasts of 5.7 percent year-over-year growth. May’s year-over-year reading for inflationary growth was 6.0 percent and could suggest that inflation has peaked.

Mortgage Rates Rise After Fed Raises Key Interest Rate Range

Although the Federal Reserve raised its key interest rate range in an attempt to slow inflation, mortgage rates also rose last week. Freddie Mac reported that rates for 30-year fixed-rate mortgages rose by 21 basis points to 5.51 percent on average. Rates for 15-year fixed-rate mortgages averaged 22 basis points higher at 4.67 percent. The average rate for 5/1 adjustable rate mortgages was 16 basis points higher at 4.35 percent; discount points averaged 0.80 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week with 244,000 first-time claims filed as compared to the previous week’s reading of 235,000 initial jobless claims filed. Fewer ongoing jobless claims were filed last week with 1.33 million continuing claims filed as compared to the prior week’s reading of 1.37 million ongoing jobless claims filed.

Consumer concerns over inflation eased in July with a preliminary reading of 51.1 reported in the University of Michigan’s preliminary consumer confidence index. Any reading over 50 indicates that most consumers surveyed were confident about current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on home prices, building permits issued, and housing starts. Data on sales of previously-owned homes will be released along with weekly readings on mortgage rates and jobless claims.  

 

What’s Ahead For Mortgage Rates This Week – July 5, 2022

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What's Ahead For Mortgage Rates This Week - July 5, 2022Last week’s scheduled economic news included reports on home prices, pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller: National Home Price Growth Ticks Down in April

Home price growth slowed in April according to the S&P Case-Shiller National Home Price Index as growth slowed by 0.20 percent to a 20.40 percent gain year-over-year. Slower growth in home prices suggested that affordability concerns have caught up with the rapid home price growth seen during the pandemic.

The S&P Case-Shiller 20-City Home Price Index reported that Tampa, Florida home prices gained 35.8 percent year over year in April followed by a 33.3 percent price gain in Miami, Florida. Home prices in Phoenix, Arizona grew by 31.3 percent year-over-year.

Pending home sales rose by 0.70 percent in May as compared to April’s reading of -0.40 percent.  Analysts expected pending home sales to fall by 0.40 percent in May.

Fixed Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower fixed mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by 11 basis points to 5.70 percent. Rates for 15-year fixed rate mortgages averaged 4.83 percent and were nine basis points lower than in the prior week. The average rate for 5/1 adjustable rate mortgages rose by nine basis points to 4.50 percent. Discount points averaged 0.90 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. 

New jobless claims fell to 231,000 claims filed last week as compared to 233,000 initial claims filed in the prior week. Continuing jobless claims were unchanged with 1.33 million ongoing claims filed last week.

In other news, the federal government reported that the Consumer Price Index rose by 8.60 percent year-over-year in May. This was the highest reading since 1981. Rising inflation was largely caused by rising food and fuel prices. The month-to-month reading for the Consumer Price index rose to 0.60 percent in May as compared to April’s month-to-month reading of 0.20 percent growth. Analysts said that the economy is slowing due to rising consumer prices and interest rates; the  Federal Reserve recently rose its key interest rate range to 0.75 to 1.00 percent to ease rapidly rising inflation.

What’s Ahead

This week’s scheduled economic reports include labor sector data on job growth, the national unemployment rate, and job openings. Weekly readings on mortgage rates and jobless claims will also be released.

Case-Shiller: Home Price Growth Slows in April

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Case-Shiller: Home Price Growth Slows in April

U.S. home price growth continued but slowed in April according to the S&P Case-Shiller Home Price Indices. The national home price index posted year-over-year home price growth of 20.4 percent in April as compared to the corresponding home price growth rate of 20.6 percent in March. Analysts said that diminishing affordability was slowing rapid gains in home prices seen during the pandemic.

20-City Home Price Index: Florida and Arizona Report Top Home Price Growth Rates

The top three cities for year-over-year home price growth in April’s 20-City Home Price Index were Tampa, Florida with a reading of 35.8 percent; Miami, Florida reported 33.3 percent growth and Phoenix, Arizona reported a year-over-year home price growth rate of 31.3 percent.

Nine of the 20 cities included in the index reported higher price gains in April as compared to March. All 20 cities reported higher home prices in April than in March. While analysts noted the slower pace of home price growth, they cautioned against expecting falling home prices any time soon. Craig J. Lazzara, managing director of S&P Dow Jones Indices said that April’s increase in home prices ranked in the top 20 percent of historical experience for every city, and in the top 10 percent for 19 of the cities included in the 20-City Home Price Index.

FHFA House Price Index: Home Prices Rise in April

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a year-over-year home price growth rate of 18.8 percent for single-family homes owned or financed by Fannie Mae or Freddie Mac. Home prices of homes owned or financed by Fannie Mae and Freddie Mac rose at a month-to-month pace of 1.6 percent in April.

The FHFA Home Price Index reports on home prices across the nine Census divisions; month-to-month home price growth ranged from 0.3 percent in the East South-Central division to 14.1 percent in the Mid-Atlantic division to 23.5 percent in the South Atlantic division. The FHFA Home Price Index is based on single-family home sales data from more than 400 cities in all 50 states. 

What’s Ahead For Mortgage Rates This Week – June 27, 2022

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What's Ahead For Mortgage Rates This Week - June 27, 2022

Last week’s economic reporting included readings on home sales, Fed Chair Jerome Powell’s testimony on monetary policy to the House Financial Services Committee, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims were also released.

New Home Sales Pace Rises as Pre-Owned Homes Sales Pace Slows

The Commerce Department reported a seasonally-adjusted annual pace of 696,000 new homes sold in May; analysts predicted a year-over-year pace of 587,000 new homes sold as compared to April’s year-over-year pace of 629,000  new homes sold. While the year-over-year pace of new home sales increased by 10.70 percent month-to-month in May, the year-over-year sales pace for new homes fell by 5.90 percent.

Increasing materials and labor costs continued to challenge home builders, but high demand for homes fueled sales of new homes even as mortgage rates and home prices rose.  The median price of new homes sold in May fell to $449,000 from April’s record high of $454,700. The inventory of available homes fell by 7.20 percent in May, which equaled a 7.70-month supply of new homes for sale.

Regional results for new home sales were mixed; sales of new homes fell by -51.10 percent in the Northeast and were -18.30 percent lower in the Midwest. New home sales rose by 12.80 percent in the South and were 39.30 percent higher in the West.

In other news, Fed Chair Jerome Powell spoke on monetary policy before the House Financial Services Committee and explained the Fed’s strategy to ease inflation through a series of interest rate increases intended to cut into consumers’ purchasing power. 

Mortgage Rates Rise; New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by three basis points to 5.81 percent. Rates for 15-year fixed-rate mortgages averaged 4.92 percent and were 11 basis points higher than in the previous week. The average rate for 5/1 adjustable rate mortgages was eight basis points higher at 4.41 percent. Discount points averaged 0.80 percent for 30-ye

ar fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages.

Initial jobless claims fell to 229,000 new filings last week as compared to 231,000 new claims filed in the previous week. Analysts expected 225,000 new jobless claims last week. Continuing jobless claims inched up with 1.32 million continuing claims filed as compared to the previous week’s reading of 1.31 ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index fell to an index reading of 50.0 for June as compared to May’s reading of 50.2 and the expected June reading of 50.2. Consumer concerns over fuel prices and rising inflation eroded consumer confidence in the economy. Readings above 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reports include readings from Case-Shiller on home prices, pending home sales,  and construction spending. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – June 13, 2022

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What's Ahead For Mortgage Rates This Week - June 13, 2022

Last week’s economic reporting was highly focused on inflation, which grew at its fastest pace since 1981. Rising fuel and food prices boosted inflation in the U.S. and abroad; Analysts said the Ukraine War and supply chain problems continued to drive inflation. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Hits Highest Level in 41 Years

The government’s Consumer Price Index, which tracks inflation, rose at a month-to-month pace of 1.0 percent in May compared to the expected reading of 0.70 percent and April’s reading of 0.30 percent growth. May’s Core Consumer Price Index, which excludes food and fuel sectors, rose by 0.60 percent month-to-month.

Year-over-year readings for inflation also increased in May as inflation rose by 8.60 percent compared to an expected reading of 

8.30 percent growth that matched April’s reading for year-over-year inflation. The year-over-year core Consumer Price Index rose by 6.0 percent in May compared to expectations of 5.90 percent and April’s year-over-year reading of 6.20 percent growth in consumer prices. Consumers felt the most pain paying higher rents and dealing with rising food and fuel prices. These categories represent a significant portion of household expenses and there was no immediate relief in sight. The Federal Reserve plans to raise its key interest rate range every month as it attempts to slow rapid inflation.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose by 14 basis points to 5.23 percent; rates for 15-year fixed-rate mortgages averaged six basis points higher at 4.38 percent. Rates for 5/1 adjustable rate mortgages loans were eight basis points higher at 4.12 percent. Discount points for 30-year fixed-rate mortgages averaged 0.90 percent and 0.80 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent. Ongoing shortages of available homes and rising materials costs continued boosting home prices and eroding affordability for first-time and moderate-income home buyers.

Initial jobless claims increased last week with 229,000 first-time claims filed compared to the prior week’s reading of 202,000 initial claims filed. Continuing jobless claims were unchanged last week with 1.31 million ongoing claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on housing markets, building permits issued, and housing starts. The Federal Reserve’s Federal Open Market Committee will release its post-meeting statement and Federal Reserve Chair Jerome Powell will give a post-meeting press conference. Weekly readings on mortgage rates and jobless claims will also be released

Case-Shiller, FHFA Post New Records for Home Price Growth

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Case-Shiller, FHFA Post New Records for Home Price GrowthS&P Case-Shiller’s National Home Price Index rose by 19.80 percent year-over-year in February and was the third-largest pace of home price growth since the National Home Price Index’s inception. The 20-City Home Price Index reported that Phoenix, Arizona held its first-place ranking with year-over-year home price growth of 32.90 percent. Tampa, Florida maintained its second-place standing with year-over-year home price growth of 32.60 percent. Miami, Florida reported year-over-year home price growth of 29.70 percent year-over-year. Home prices rose faster for all 20 cities in February than in January.

Rapid Home Price Growth Expected to Slow as Rising Mortgage Rates Take Hold

All 20 cities included in the 20-City Home Price Index posted double-digit price growth in February, but analysts cautioned that the two-month lag in reporting didn’t accurately reflect current market conditions.  Recent data on home sales and mortgage applications indicated that demand for homes is slowing due to affordability challenges caused by rapidly rising home prices and mortgage rates. Economists expect the housing market to cool as would-be home buyers face mortgage qualification and affordability challenges.

Craig J. Lazzara, managing director of S&P Dow Jones Indices, said: “The macroeconomic environment is evolving rapidly and may not support extraordinary home-price growth for much longer.” Mr. Lazzara also said that rising mortgage rates have not yet impacted home-price data, but would likely do so soon.

Selma Hepp, a  chief deputy economist at CoreLogic, said: “With diminished buying power and mortgage rates pushing above five percent in recent weeks, home- price growth is likely to take a step back in coming months.” Economists generally expect home price growth to slow as sales volume declines.

FHFA Reports  Record Home Price Growth in February

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported that home prices rose by 19.40 percent year-over-year; home prices for single-family homes owned by Fannie Mae and Freddie Mac rose by 1.10 percent from January to February.  FHFA reported higher home prices across all nine census divisions. Home prices grew fastest in the Mountain Division, where home prices rose by 24.30 percent year-over-year in February.

Will Doerner, Ph. D   and Supervisory Economist at FHFA’s Division of Research and Statistics, said: “House prices rose to a new historical record in February. Acceleration approached twice the monthly rate as seen a year ago. Housing prices continue to rise owing in part to supply constraints.” Rising materials costs, labor, and lot shortages continued to rein in new home construction.