Sunrise Homes & Renovations, Inc.

What’s Ahead For Mortgage Rates This Week – April 25, 2022

by

What's Ahead For Mortgage Rates This Week - April 25, 2022Last week’s economic reporting included the National Association of Home Builders Housing Market Index, government readings on housing starts and building permits, and data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Builder Confidence in Housing Market Conditions Slips by Two Points

Homebuilder confidence fell by two points to an index reading of 77 in April and was the lowest reading since September. Analysts expected this dip as mortgage rates and building materials costs continued to rise. Index readings over 50 indicate that most builders have positive views of housing market conditions. Index readings haven’t fallen below 50 since the beginning of the pandemic in April and May of 2020.

Robert Dietz, the chief economist for the NAHB, said: “The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices, and escalating materials costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.”

Analysts viewed the combined impact of rising home prices and mortgage rates as obstacles to affordability that would disproportionately affect first-time and moderate-income homebuyers.

Building permits held steady in March with 1.87 million permits issued at a seasonally-adjusted annual pace; analysts expected a reading of 1.82 million building permits issued. Likewise, housing starts were unchanged in March from February’s seasonally-adjusted annual pace of 1.79 million housing starts. Analysts predicted a reading of 1.73 million housing starts.

The National Association of Realtors® reported a slower pace of sales for previously-owned homes in March.5.77 million pre-owned homes were sold on a seasonally-adjusted annual pace as compared to a seasonally adjusted annual pace of 5.93 million previously-owned homes sold in February. Rising mortgage rates and home prices sidelined some first-time and moderate-income buyers and caused sales of previously-owned homes to fall.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported that the average rate for 30-year fixed-rate mortgages surpassed five percent last week at 5.11 percent. The average rate for 15-year fixed-rate mortgages rose by 21 basis points to 4.38 percent. Rates for 5/1 adjustable rate mortgages rose by six basis points on average to 3.75 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell last week with 184,000 first-time claims filed as compared to 186,000 initial claims filed in the previous week. Continuing jobless claims were also lower with 1.42 million claims filed last week as compared to the prior week’s reading of 1.45 million continuing jobless claims filed. 

What’s Ahead

This week’s scheduled economic reports include readings on home prices, new and pending home sales, and reports on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published. 

Case-Shiller Home Price Indices: Home Prices Grow at a Near-Record Pace

by

Case-Shiller Home Price Indices: Home Prices Grow at a Near-Record PaceU.S home prices grew at a near-record pace in January according to the National S&P Case-Shiller Home Price Index; year-over-year home prices rose by 19.20 percent in January as compared to December’s reading of 18.90 percent. Home prices rose 1.80 percent on a month-to-month basis from December to January.

While home prices continued to grow at near-record rates, home price growth slowed in some areas during  December but picked up in January. Craig M. Lazzara, managing director at S&P Dow Jones Indices, said: “Last fall we observed that home prices, although continuing to rise sharply, had begun to decelerate. Even that modest deceleration was on pause in January.”

The top three cities for home price growth held their places in January. Phoenix, Arizona had the highest pace of home price growth with a year-over-year gain of 32.60 percent; Tampa, Florida reported a year-over-year gain of 30.80 percent. Miami, Florida held third place with a year-over-year home price growth rate 0f 28.10 percent.

All 20 cities tracked by Case-Shiller reported record gains in year-over-year home prices while 16 of 20 cities included in the 20-City Index reported higher home price gains in January than in December.

FHFA House Price Report Shows Strong Growth

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported that home prices rose by 18.20 percent year-over-year in January. December’s year-over-year growth pace was 17.70 percent for homes owned by Fannie Mae and Freddie Mac.  Home prices rose fastest in the Mountain region, which includes Arizona, Colorado, Idaho, Montana, Nevada, New Mexico Utah, and Wyoming. Year-over-year home prices rose by 23 percent or more in the Mountain region.

Will Doerner, a supervisory economist at FHFA, said: “So far, the mortgage rate growth has not dampened upward price pressure from intense buyer demand and limited supply.” Low inventories of available homes continue to drive demand for homes, but some economists expect the pace of home sales to drop by as much as 25 percent in response to rising mortgage rates. Analysts expect that low inventories of available homes will sustain rising home prices. Homebuyers can expect to compete for available homes as buyers rush to lock in lower mortgage rates; cash buyers and bidding wars can cause home prices to rise above market value in high-demand markets.

What’s Ahead For Mortgage Rates This Week – March 21, 2022

by

What's Ahead For Mortgage Rates This Week - March 21, 2022Last week’s economic reporting included readings on housing markets from the National Association of Home Builders, sales of previously-owned homes, and government reports on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Builder Confidence Slips Two Points in March

The National Association of Home Builders reported that home builder confidence in housing market conditions slipped two points to an index reading of 79. Analysts expected a reading of 80 based on February’s reading of 81. Robert Dietz, the NAHB’s chief economist, said: “While low existing inventory and favorable demographics are supporting demand, the impact of elevated inflation and higher interest rates suggest caution for the second half of 2022.”  Builders also expressed ongoing concerns over rising materials costs and labor shortages.

While springtime traditionally opens peak home-buying season, industry analysts cautioned that this year’s homebuying season may fall far short of its usual performance as concerns over the pandemic and rapidly rising inflation persist. Home prices increased significantly in 2021 and affordability issues challenged prospective first-time and moderate-income home buyers. Demand for homes may ease as fewer buyers can afford rising home prices, mortgage rates, and qualify for financing due to tighter mortgage lending standards.

Mortgage Rates Rise After Fed Raises Key Interest Rate for First Time in Four Years

In its customary statement made after the meeting of Federal Reserve policymakers, the Fed announced its first increase in the federal interest rate range in four years. The rate range increased from 0.00-0.25 percent to 0.25-0.50 percent. Fed leaders announced that a strategy of measured interest rate increases is planned to ease rapid inflation.

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose 31 basis points to 4.16 percent. The average rate for 15-year fixed-rate mortgages rose 30 basis points to an average of 3.39 percent. Rates for 5/1 adjustable-rate mortgages averaged3.19 percent and were 22 basis points higher. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable-rate mortgages.

Initial jobless claims fell to 214,000 claims filed as compared to the previous week’s reading of 229,000 first-time jobless claims filed. Analysts expected a reading of 220,000 new jobless claims filed. Continuing jobless claims were also lower with 1.42 million ongoing jobless claims filed; 1.49 million continuing claims were filed in the previous week.

The federal government reported a seasonally-adjusted annual pace of 1.77 million housing starts in February; analysts estimated 1.70 million starts as compared to January’s reading of 1.66 million housing starts. Fewer building permits were issued in February with a seasonally-adjusted annual pace of 1.86 million permits issued as compared to January’s year-over-year pace of 1.90 million building permits issued. Analysts expected a seasonally-adjusted annual pace of 1.85 million building permits issued.  

What’s Ahead

This week’s scheduled economic reporting includes readings on new home sales and pending home sales; the University of Michigan will release its final consumer sentiment index for March. Weekly readings on mortgage rates and jobless claims will also be published. 

What’s Ahead For Mortgage Rates This Week – February 28, 2022

by

What’s Ahead For Mortgage Rates This Week – February 28, 2022Last week’s economic reporting included readings on home prices from S&P Case-Shiller and the Federal Housing Finance Agency; data on pending home sales and sales of new homes were also released. The University of Michigan released its final February reading on consumer sentiment and weekly reports on average mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices: Home Price Growth Expected to Slow in 2022

December readings from S&P Case Shiller suggested a slowing pace of home price growth in 2022 but analysts said that home prices are not expected to decrease. Case-Shiller’s National Home Price Index showed an 18.80 percent increase in home prices year-over-year. S&P Case-Shiller’s 20-City Home Price Index reported that Phoenix, Arizona held on to its first-place standing for home price growth with home prices increasing by 32.50 percent year-over-year. Tampa, Florida home prices rose by 29.40 percent, and the Miami, Florida metro area reported home price growth of 27.30 percent. Analysts expect that home prices will continue to rise, but not at the extreme pace seen in 2021.

The Federal Housing Finance Agency, which oversees properties owned and financed by Fannie Mae and Freddie Mac, reported year-over-year home price growth of 17.60 percent as of December. Analysts said that January’s bad weather, rising mortgage rates, and continued impacts of  Covid-19 and its variants decreased sales of new homes by 9.30 percent in January. The National Association of Realtors® reported supplies of available homes were in the normal range with a 6.1-month supply of homes available. A six-month supply of available homes is considered an average inventory.

Mortgage Rates, Jobless Claims

Freddie Mac reported lower average rates for fixed-rate mortgages as the average rate for 30-year fixed-rate mortgages fell by three basis points to 3.89 percent; rates for 15-year fixed-rate mortgages dropped one basis point to an average of 3.14 percent. Rates for 5/1 adjustable-rate mortgages were unchanged at 2.98 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable-rate mortgages averaged 0.30 percent.

Initial jobless claims were lower last week with 232,000 new claims filed as compared to the prior week’s reading of 249,000 initial claims filed. Analysts expected 235,000 new jobless claims to be filed last week. 1.48 million continuing jobless claims were filed last week as compared to the prior week’s reading of 1.59 million continuing jobless claims filed.

What’s Ahead

This week’s scheduled economic reading includes data on construction spending, public and private sector jobs, and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be released.

S&P Case-Shiller Indices: December Home Price Growth Hits Record High

by

S&P Case-Shiller Indices: December Home Price Growth Hits Record HighWhile U.S. home prices grew at record speed in December, rising mortgage rates threatened rapid price appreciation as buyers were sidelined by affordability concerns. S&P Case-Shiller’s National Home Price Index reported 18.80 percent year-over-year home price growth in December.

The 20-City Home Price Index posted a year-over-year gain of 18.60 percent as compared to November’s year-over-year home price gain of 18.30 percent. Home prices rose by 1.50 percent from November to December 2020. Phoenix, Arizona held on to first place in the 20-City Index with year-over-year home price growth of 32.50 percent; Tampa, Florida held second place with 29.40 percent year-over-year home price growth. The Miami, Florida metro area held third place with year-over-year home price growth of 27.30 percent.

Rising Mortgage Rates Impact Affordability for Prospective Homebuyers

Analysts predicted slowing home price growth as mortgage rates rise and affordability issues impact prospective home buyers. Danielle Hale, a chief economist at Realtor.com, said: “Home prices continued to surpass expectations in December, but a marked change may be ahead for growth as rising mortgage rates eat into buyers’ purchasing power.”

Ms. Hale described a trend that could signal slower home price growth. “While typical asking prices continue to accelerate, the pace of median sales price growth has slowed, signaling a potential gap between what buyers are willing and able to pay and what sellers are hoping to receive.”

The quarterly report issued by the Federal Housing Finance Agency supported trends evident in the S&P Case-Shiller Home Price Indices. Prices for homes owned or financed by Fannie Mae and Freddie Mac rose by 17.50 percent year-over-year in December. The FHFA reported the strongest home price growth in Arizona, Utah, and Idaho during the fourth quarter of 2021.

The strongest state housing markets for  FHFA were Arizona, Utah, and Idaho, while the weakest housing markets were in Washington, DC, Louisiana, and North Dakota. Homebuyers continued to seek homes in less congested suburban and rural areas due to rising home prices. This trend originally started as Covid-19 outbreaks and work-from-home opportunities prompted city dwellers to relocate to areas less affected by the virus.

Analysts recognized that rising home prices sidelined moderate-income and first-time homebuyers, but did not expect home prices to fall in the coming months.

What’s Ahead For Mortgage Rates This Week – February 22, 2022

by

What's Ahead For Mortgage Rates This Week - February 22, 2022

Last week’s economic reporting included readings from the National Association of Home Builders on housing markets, reports on sales of previously owned homes, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Rising Materials Costs, Supply Chain Problems Weigh on Builders

The National Association of Home Builders’ February housing market index reading was 82 and one point lower than in January. This was the second consecutive month that builder confidence dropped by one point. Homebuilder confidence in housing market conditions remained relatively high as any index reading over 50 indicates that most builders are confident about market conditions.

Short supplies of available homes and high demand combined to hold builder confidence steady, but growing concerns over rising materials costs, delivery delays, and labor shortages put downward pressure on builder confidence. NAHB chair Jerry Konter wrote, “Many builders are waiting months to receive cabinets, garage doors, countertops, and appliances. These delivery delays are raising construction costs and pricing prospective buyers out of the market.” Rising mortgage rates coupled with rising home prices were regarded by homebuilders as threats to affordability for moderate-income and first-time home buyers. 

Building Permits Increase as Housing Starts Decline

The Commerce Department reported that building permits issued exceeded expectations and the prior month’s reading. 1.90 million building permits were issued on a seasonally-adjusted annual basis in January as compared to the expected reading of 1.75 million permits issued and December’s reading of 1.89 million permits issued.

January housing starts decreased to 1.64 million starts on a seasonally-adjusted annual basis from December’s reading of 1.71 million starts and the expected reading of 1.69 million housing starts. Economists expect a slowdown in home building as shortages of available homes, rising home prices, and mortgage rates continue to impact affordability.

January sales of previously-owned homes rose to 6.50 million sales on a seasonally-adjusted annual basis from December’s reading of 6.09 million sales. Analysts predicted a reading of 6.10 million sales.

Mortgage Rates Rise, Jobless Claims Mixed

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose 23 basis points to 3.92 percent. Rates for 15-year fixed-rate mortgages averaged 3.15 percent and were 22 basis points higher. The average rate for 5/1 adjustable rate mortgages rose by 18 basis points to 2.98 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose to 248,000 claims filed; analysts expected 218,000 new claims to be filed based on 225,000 initial jobless claims filed in the prior week. 1.59 million ongoing jobless claims were filed last week as compared to the previous week’s reading of 1.62 million continuing jobless claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency Home Price Index, data on new home sales, and the University of Michigan’s Consumer Sentiment Index.