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What’s Ahead For Mortgage Rates This Week – May 22, 2023

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What's Ahead For Mortgage Rates This Week - May 22, 2023Last week’s economic reporting included readings on U.S. housing markets, sales of previously-owned homes, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: U.S. Home Builder Confidence Rises in May

The National Association of Home Builders reported a five-point gain in home builder confidence in current housing market conditions in May. The index reading for May rose to 50 in May as compared to April’s reading of 45. Analysts expected a reading of 45 for May. Readings above 50 indicate a majority of home builders are positive about current housing market conditions. Component readings of the home builder index also rose as the gauge for current market conditions rose by five points to 50; the reading for market conditions over the next six months rose by seven points and the index reading for buyer traffic increased by two points.

Builders surveyed indicated that homeowners aren’t motivated to sell as many of them bought or refinanced their homes during the pandemic when mortgage rates were very low. Aspiring homeowners are turning to new homes for more options as demand for homes continues to outpace the number of previously-owned homes available.

 Higher demand for homes caused developers to reduce incentives to homebuyers. Homebuilders offering price reductions on new homes fell from 30 percent in April to 27 percent in May.  NAHB said home price reductions averaged six percent of original home prices.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 6.39 percent and were four basis points higher than for the previous week. Rates for 15-year fixed-rate mortgages averaged 5.75 percent, which was unchanged from the prior week.

242,000 initial jobless claims were filed last week as compared to 255,000 expected claims and 264,000 first-time jobless claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reporting includes readings on new and pending home sales, minutes from the recent Federal Open Market Committee meeting, and the final consumer sentiment reading for May. Weekly readings on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – May 15, 2023

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What's Ahead For Mortgage Rates This Week - May 15, 2023Last week’s scheduled economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Rises in April, Slower Pace Expected in Coming Months

The  U.S. Labor Department reported the month-to-month pace of inflation rose by 0.40 percent in April and matched analysts’ expectations. April’s reading surpassed the March reading of 0.10 percent month-to-month inflationary growth. Inflation rose by 4.90 percent year-over-year in April. Analysts expect inflationary growth to continue, but at a slower pace through 2023.

Core inflation, which excludes volatile food and fuel sectors, rose at a month-to-month pace of 0.40 percent in April, which matched expectations and the March reading. Year-over-year core inflation rose by 4.90 percent in April as compared to the expected reading of 5.00 percent and the March reading of 5.00 percent.

Mortgage Rates Fall as Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by four basis points to 6.35 percent. Rates for 15-year fixed-rate mortgages averaged one basis point lower at 5.75 percent. First-time jobless claims rose with 264,000 claims filed as compared to the expected reading of 245,000 claims and the prior week’s reading of 242,000 initial jobless claims filed.

As inflation slows, rapidly rising rental rates and home prices are also expected to increase at a slower pace. As homeownership becomes more affordable, fewer families will rely on rental homes. Less demand for rentals should help with easing very high rental rates seen in many metro areas. In general, more affordable housing choices could help ease housing challenges in areas with few affordable housing options.

The preliminary consumer sentiment survey for May reflects less consumer enthusiasm for current economic conditions. The initial index reading for May is 57.7, which fell short of the expected reading of 63.0 and April’s index reading of 63.5. May’s reading was the lowest since November 2022.

What’s Ahead

This week’s scheduled economic reporting includes readings on sales of previously-owned homes, housing market conditions, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – May 8, 2023

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What's Ahead For Mortgage Rates This Week - May 8, 2023Last week’s economic news included reporting on construction spending, the Federal Reserve’s decision to raise its benchmark interest rate, and weekly readings on mortgage rates and jobless claims.

Construction Spending Increases in March

The Commerce Department reported that month-to-month construction spending rose by 0.30 percent and year-over-year construction spending increased by $1.83 trillion. Residential construction fell by -0.20 percent in March, which was the tenth consecutive monthly decline in residential construction spending. Non-residential construction spending rose by 0.70 percent in March for the ninth gain in the past 10 months.

Fed Raises Key Interest Rate Range

Federal Reserve policymakers raised the Fed’s key interest rate range by a quarter point to 5.00-5.25 percent at its Federal Open Market Committee meeting held on Tuesday and Wednesday. This was the tenth consecutive rate hike as the Fed continues efforts to control inflation.

Analysts noticed a subtle change in the tone of the Fed’s post-meeting statement and suggested that the less aggressive tone used in the post-meeting statement signaled a softer approach to raising the Fed’s benchmark rate. While some Fed policymakers recently suggested the possibility of a recession, Fed Chair Jerome Powell disagreed: “This is not my own most likely case.” Chair Powell also said that he expected economic growth in 2023 but at a slower pace.

Mortgage Rates Mixed, Jobless Claims Rise

Freddie Mac reported mixed movement of mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by four basis points to 6.39 percent. The average rate for 15-year fixed-rate mortgages rose by five basis points to 5.76  percent.

Initial jobless claims rose to 242,000 claims filed last week as compared to the prior week’s reading of  229,000 first-time claims filed. Continuing jobless claims fell with 1.81 million claims filed as compared to the prior week’s reading of 1.84 million claims filed.

What’s Ahead

This week’s scheduled economic news includes readings include readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.

What’s Ahead For Mortgage Rates This Week – May 1, 2023

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What's Ahead For Mortgage Rates This Week - May 1, 2023Last week’s economic reporting included readings on home prices, sales of new homes, and pending home sales. Monthly and year-over-year readings for inflation were published along with weekly reports on mortgage rates and jobless claims.

February S&P Case-Shiller Housing Market Indices show slower home price growth

National home prices continued to rise in February, but at a slower pace according to S&P Case-Shiller home price indices. Month-to-month home prices rose by  0.40 percent in February and matched analysts’ expectations, but were lower than January’s reading of  2.50 percent home price growth.

S&P Case-Shiller’s 20-city home price index, which is frequently used by real estate professionals for tracking housing markets, rose by 0.10 percent month-to-month in February.  This was the first time home prices rose in eight months.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported an increase of  0.50 percent in home prices for homes owned and sold by Fannie Mae and Freddie Mac.Properties owned and sold by Fannie Mae and Freddie Mac are subject to loan limits and underwriting rules used by the two agencies.

In related news, the National Association of  Realtors® reported pending home sales fell by -5.20 percent in March compared to the expected reading of 0.50 percent growth and February’s reading of 0.80 percent in pending sales.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported mixed movement on mortgage rates as the average rate for 30-year fixed-rate mortgages rose by four basis points to 6.43 percent. Rates for 15-year fixed-rate mortgages fell by five basis points and averaged 5.71 percent.

Initial jobless claims fell to 230,000 claims compared to the expected reading of 246,000 claims and the previous week’s reading of 245,000 claims. Continuing jobless claims fell to 1.86 million filings from the prior week’s reading of 1.87 million ongoing claims.

The University of Michigan reported no change in consumer responses to its consumer sentiment survey for April. The index reading of 63.5 for March was unchanged in April and also matched analysts’ forecasts.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending, the Federal Open Market Committee’s scheduled statement, and Fed Chair Jerome Powell’s post-meeting press conference. Readings on public and private-sector employment and national unemployment are also scheduled for release.

What’s Ahead For Mortgage Rates This Week – April 17, 2022

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What's Ahead For Mortgage Rates This Week - April 17, 2022Last week’s economic reporting included readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

March Inflation Slows as Retail Sales Fall

Inflation slowed to a month-to-month pace of 0.10 percent in March as compared to February’s reading of 0.40 percent growth. Year-over-year inflation rose by 5.00 percent and fell short of analysts’ expected reading of 5.10 percent year-over-year inflation and February’s year-over-year inflation rate of 6.00 percent.

Core inflation, which excludes volatile readings for food and fuel, rose by 0.40 percent in March and matched analysts’ expectations.  The year-over-year reading for core inflation showed 5.00 percent inflation year-over-year in March; analysts expected a year-over-year reading of 5.10 percent and February’s year-over-year reading 6.00 percent. While food and fuel costs are significant for most households, the Fed views the core reading as a more stable indicator of inflationary trends.

Retail sales fell by 1.00 percent in March; analysts expected a reading of –0.50 percent. Retail sales excluding autos fell by –0.80 percent in March. Analysts forecasted a reading of –0.40 percent for March retail sales as compared with February’s reading of 0.00 percent change in retail sales.

Mortgage Rates Fall as Jobless Claims Increase

Freddie Mac reported lower mortgage rates for the fifth consecutive week as the average rate for 30-year fixed rate mortgages fell by one basis point to 6.27 percent. Rates for 15-year fixed rate mortgages were also one basis point lower and averaged 5.54 percent.

First-time jobless claims rose to 239,000 claims filed as compared to the previous week’s reading of 228,000 claims filed and analysts’ expectations of 235,000 new claims filed. Continuing jobless claims fell to 1.81 million ongoing claims filed as compared to the previous week’s reading of 1.82 million claims.

The University of Michigan’s Consumer Sentiment Index for April showed a confidence reading of 63.5 as compared to the expected reading of 62 and the March reading of 62. Readings above 50 indicate that most consumers are confident about current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on U.S. housing markets, sales of previously owned homes, housing starts, and building permits issued. Weekly reports on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – March 27, 2023

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What's Ahead For Mortgage Rates This Week - March 27, 2023Last week’s financial and economic reporting included readings on sales of new and previously-owned homes, along with weekly data on mortgage rates and jobless claims.

Single-Family Home Sales Rise in February

Year-over-year sales of previously owned homes rose 14.5 percent to a seasonally-adjusted pace of 4.58 million sales. Analysts expected 4.20 million sales of pre-owned homes as compared to January’s year-over-year reading of 4.0 million sales. February’s increased sales halted 12 months of falling sales of previously-owned homes. February’s reading marked the highest pace of sales since July 2020, when sales of pre-owned homes rose by 22.40 percent.

The National Association of Realtors® said that February’s reading represented the largest increase in existing home sales since the inception of reporting sales of previously-owned homes in 1999. The median sale price of existing homes was $363,000 in February. There was a 2.6-month supply of homes available in February.

February sales of new single-family homes rose to 640,000 sales from January’s reading of 633,000 sales. While analysts said that a brief lull in climbing mortgage rates contributed to increased home sales, new home sales remained 22.60 percent lower than in February 2021.

FOMC Statement: Fed Strives to Hold Inflation in Check, Mortgage Rates Fall

The Federal Reserve’s Federal Open Market Committee released the minutes of its March meeting; the Committee voted to raise its key interest rate range to 4.75 to 5.00 percent; the Committee reaffirmed its goal of returning inflationary growth to two percent. Fed Chair Jerome Powell said that the Fed was planning to continue rate hikes before the failure of Silicon Valley Bank. Chairman Powell said the bank’s failure forced Fed policymakers to consider a halt to interest rate hikes.

Freddie Mac reported lower average mortgage rates as the rate for 30-year fixed-rate mortgages fell by 18 basis points to 6.42 percent. The average rate for 15-year fixed-rate mortgages fell by 22 basis points to 5.68 percent. Initial jobless claims fell slightly to 191,000 claims as compared to the previous week’s reading of 192,000 first-time claims filed. Continuing jobless claims rose to 1.69 million claims filed from the prior week’s reading of 1.68 million ongoing claims filed.

What’s Ahead

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