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What’s Ahead For Mortgage Rates This Week – October 22nd, 2018

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What's Ahead For Mortgage Rates This Week - October 22nd, 2018Last week’s economic reports included readings on home builder confidence,sales of pre-owned homes and housing starts.  The Commerce Department also issued a report on building permits issued; weekly reports on mortgage rates and first-time jobless claims were also released.

Homebuilder Confidence Rises One Point

The National Association of Home Builders reported a reading of 68 for October,which surpassed August’s reading of 67. Any reading over 50 indicates most home builders are confident about housing market conditions. Builders cited ongoing headwinds including higher prices for materials,shortages of lots and labor and rising mortgage rates. Builders sought ways to provide more affordable housing options as they faced higher costs.

Regional readings of builder confidence readings,which are tracked on a three-month rolling average,were missed. The northeastern region gained three points for a reading of 57; the southern region gained one point for an index reading of 70. The midwestern region lost two points for a reading of 57. The western region was unchanged from September’s reading of 74.

Sales of Pre-owned Homes Slip toward 3 Year Low

The National Association of Realtors® reported fewer sales of pre-owned homes in September;5.15 million sales were reported on a seasonally adjusted annual basis as compared to August’s reading of 5.33 million sales. Analysts expected a reading of 6.27 million sales for September. Faced with high home prices and slim inventories of available homes,would-be buyers sidelined their searches for homes. Housing starts were 3.40 percent lower month-to-month and hit their lowest rate since November 2015.

According to the Commerce Department,housing starts also fell in September to 1.201 million starts on a seasonally adjusted annual basis. August’s reading was 1.268 million starts. Year-over-year,housing starts were 3.70 percent higher.,but fewer housing starts were bad news for housing markets as demand continued to exceed supplies of available homes. Building permits issued also fell in September to 1.242 million permits issued as compared to August’s reading of 1.249 million permits issued.

Mortgage Rates,New Jobless Claims Lower

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed rate mortgages were five basis points lower at 4.85 percent; rates for a 15-year fixed rate mortgage averaged three basis points lower at 4.26 percent. The average rate for 5/1 adjustable rate mortgages was three basis points lower at 4.10 percent.

First-time jobless claims also fell last week to 210,000 new claims filed,which matched expectations but was lower than the prior week’s reading of 215,000 new claims filed.

What‘s Ahead

This week’s scheduled economic releases include readings on new and pending home sales along with weekly reports on mortgage rates and new jobless claims.

What’s Ahead For Mortgage Rates This Week – October 15th, 2018

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What's Ahead For Mortgage Rates This Week - October 15th, 2018Last week’s economic reports included releases on inflation, consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.

Inflation and Consumer Sentiment Dip

The Commerce Department reported slower growth in inflation for September. The Consumer Price Index for September showed a growth rate of 0.10 percent. Analysts projected a reading of 0.20 percent growth, which was based on August’s reading of 0.20 percent.

This was the sixth consecutive month-to-month increase in the inflation rate. Year-over-year, inflation has grown 2.30 percent as compared to the prior year-over-year rate of 2.70 percent.

Analysts said that rising rents and homeownership costs drove consumer prices higher, but consumer prices in other sectors eased.

Core inflation, which excludes volatile food and energy sectors, was unchanged at 0.10 percent growth month-to-month. Analysts expected CPI to increase to 0.20 percent.

According to the University of Michigan Consumer Sentiment Index for October, Consumer confidence slipped to an index reading of 99.00 as compared to September’s reading of 100.1 and expectations for an October reading of 100.6.

October’s reading exceeded the average reading of 98.50 for 2018.Analysts attributed October’s lower reading to consumer concerns over their finances as inflation rises and income remains relatively unchanged.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week. The average rate for 30-year fixed rate mortgages rose 19 basis points to 4.90 percent. 15-year fixed rate mortgage rates were 14 basis points higher and averaged 4.29 percent.

Rates for 5/1 adjustable rate mortgages averaged 4.07 percent and rose by six basis points. Last week’s average mortgage rates were the highest rates seen since April 14, 2011.

First-time jobless claims rose by 7,000 new claims filed to 214,000 new claims. Analysts expected a reading of 205,000 new claims filed based on the prior week’s reading of 207,000 first-time claims filed.

Last week’s reading was attributed to effects of Hurricane Florence, but economists said that the reading was close to low readings seen in the late 1960s.

What‘s Ahead

This week’s scheduled economic news includes readings on sales of pre-owned homes, the National Association of Home Builders Housing Market Index, Commerce Department reports on housing starts and building permits issued. The Fed’s FOMC meeting minutes will also be released, along with weekly readings on mortgage rates and first-time jobless claims.

What’s Ahead For Mortgage Rates This Week – October 8th 2018

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What's Ahead For Mortgage Rates This Week - October 8th 2018Last week’s economic reports included readings on construction spending and labor reports on public and private-sector job growth. The national unemployment rate was released along with weekly reports on mortgage rates and weekly jobless claims.

Construction Spending dips in September, but Residential Construction Spending Rises

Construction spending rose 0.10 percent in September, but residential construction spending fell 0.70 percent month-to-month. Construction spending was 4.10 percent higher year-over-year. January through August construction spending was 5.30 percent higher than for the same period in 2017.

Analysts estimated a shortage of approximately four million homes; which accentuates demand and drives prices up. In recent years, builders have concentrated on higher-end homes, but analysts said that a shift to building super-affordable homes may be in the works. High home prices and ever-increasing rents are squeezing moderate-income families; providing more affordable housing options could lessen demand and help home price growth to normalize.

Mortgage Rates Little Changed, New Jobless Claims Lower

Freddie Mac reported little change in mortgage rates; 30-year fixed rate mortgages averaged one basis point lower at 4.71 percent. The average rate for a 15-year fixed rate mortgage was also one basis point lower at 4.15 percent. Rates for 5/1 adjustable rate mortgages averaged 4.01 percent and were four basis points higher. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell last week to 207,000 new claims filed as compared to expectations of 213,000 new claims filed and the prior week’s reading of 214,000 claims filed. Analysts said that fewer claims were filed as the impact of Hurricane Florence diminished.

Labor Reports: Job Growth Mixed as Unemployment Rate Nears 49 Year Low

Commerce Department readings on public and private-sector job growth showed more private sector jobs, while the government reading for public and private sector jobs dropped/ ADP reported 230,000 more private-sector jobs in September; the government’s Non-Farm Payrolls report showed 134,000 new public and private sector jobs as compared to 270,000 new jobs in the prior month. Analysts expected 168,000 new public ad private sector jobs and said that the shortfall in job growth for September was a consequence of Hurricane Florence.

The National Unemployment Rate fell to 3.70 percent in September, which was the lowest reading in nearly 49 years.

What‘s Ahead

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

What’s Ahead For Mortgage Rates This Week – October 1st, 2018

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What's Ahead For Mortgage Rates This Week - October 1st, 2018Last week’s economic readings included reports on home prices, new and pending home sales and remarks released by the Federal Open Market Committee of the Federal Reserve. Weekly readings on average mortgage rates and first-time jobless claims were also released.

Case-Shiller HPI: Home Price Growth Slows in July

Home prices grew slower in July according to data released last week. Home prices rose at a seasonally-adjusted annual rate of 6.0 percent in July as compared to June’s rate of 6.2 percent growth. Analysts cited increasing inventories of homes available, which typically increases competition and lowers asking prices. Would-be home buyers have also suspended their home searches due to slim supplies of homes and competition with cash buyers.

New and Pending Home Sales Show Mixed Results

Sales of new homes rose in August according to the Commerce Department. New homes sold at a seasonally adjusted annual rate of 629,000 sales. Analysts expected a reading of 625,000 sales New home sales grew by 3.50 percent from July to August and were 12.70 percent higher year-over-year. New homes sold for an average price of $320,200 in August, which was a year-over-year price increase of 1.90 percent.

Pending home sales dipped in August with a reading of – 1.80 percent in August as compared to July’s reading, which was also negative at 0.80 percent. Pending sales typically slow as fall approaches and peak hone buying season ends. Pending home sales indicate what’s ahead in closed home sales and mortgage loans. Analysts said that government readings on home sales are gleaned from small samples and are subject to adjustment.

Mortgage Rates, New Jobless Claims Rise.

Freddie Mac reported higher mortgage rates last week after the Federal Reserve announced that it would raise its target federal funds range to 2.00 to 2.25 percent. Analysts said that the Federal Open Market Committee dropped the term “accommodative” in its post-meeting announcement on Wednesday.

Interest rates for a 30-year fixed rate mortgage averaged 4.72 percent, which was an increase of seven basis points. The average rate for a 15-year fixed rate mortgage rose five basis points to 4.16 percent and the average rate for a 5/1 adjustable rate mortgage rose five basis points to 3.97 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims also rose last week with 214,000 first-time claims filed as compared to expectations of 216,000 new claims filed and the prior week’s reading of 202,000 new claims filed. High numbers of claims filed in Kentucky, North Carolina and South Carolina suggested that the jump in initial claims related to Hurricane Florence.

What‘s Ahead

This week’s scheduled economic releases include readings on public and private-sector jobs growth, the national unemployment rate and construction spending. Weekly readings on mortgage rates and new unemployment claims will also be released.

Fed Raises Key Interest Rate For 3rd Consecutive Time

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Fed Raises Key Interest Rate for 3rd Consecutive TimeThe Federal Open Market Committee of the Federal Reserve announced that it raised the target federal funds rate to a range of 2.00 percent to 2.25 percent. This was the third consecutive increase in the Fed’s key interest rate and was the eighth time the Fed raised its key interest rate since 2015.

In its customary post-meeting statement, Committee members cited strong economic conditions and continued labor market growth coupled with historically low unemployment rates as a basis for raising the federal funds interest rate.

Fed Cites Steady Inflation, Healthy Household And Business Spending

Further economic conditions cited in the FOMC statement were steady inflation, which has held close to the Fed’s objective of two percent for a year. Projections on long-term inflation were “little changed” according to the statement.

FOMC’s statement explained how committee members make decisions about the target range for the federal funds rate. The Federal Reserve must make decisions based on its legislative mandate of achieving and maintaining maximum employment and an inflation rate at or near two percent.

The FOMC also considers measures of economic and labor conditions, pressures on inflation and projections on inflation. Committee members keep up-to-date on domestic and global economic developments.

After the FOMC statement was released, Fed Chair Jerome Powell gave a press conference.

Fed Chair: Economy Strengthening Without Need Of Fed Accommodation

Federal Reserve Chair Jerome Powell expressed confidence in current economic conditions and said that future rate hikes would help maintain the Fed’s goals and promote healthy economic growth. Mr. Powell said that future meetings of the Federal Open Market Committee would be guided by asking and answering the question of whether current monetary policy is set to achieve FOMC goals. Analysts interpreted Chair Powell’s comments as indicating that current economic conditions are as good as could be expected and that the Fed’s monetary policy decisions are working as planned.

 

What’s Ahead For Mortgage Rates This Week – September 24th, 2018

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What’s Ahead For Mortgage Rates This Week – September 25th, 2018Last week’s economic releases included readings on the NAHB Housing Market Index, sales of pre-owned homes, and housing starts. Weekly readings on mortgage rates and first-time jobless claims were also released.

NAHB: Home Builder Confidence in Market Conditions Holds Steady

The National Association of Home Builders reported an index reading of 67 for September, which matched August’s reading. Growing concerns over impacts of tariffs on building material costs have slowed builders’ confidence in current and future market conditions.

Components of the NAHB Housing Market Index include readings on current conditions, which gained one point to 74; builder confidence in market conditions over the next six months gained two points to a reading of 74. The HMI reading for buyer traffic in new housing developments was unchanged with a reading of 49. Readings for buyer traffic are typically below the benchmark index reading of 50. Readings over 50 indicate that most home builders are confident about housing market conditions.

Builder confidence is considered an indication of future housing supplies as builders may adjust their construction plans on market conditions and building costs. The Commerce Department reported higher housing starts in August with a seasonally-adjusted annual rate of 1,282 million starts. Analysts predicated a rate of 1.249 million starts based on July’s reading of 1.168 million starts.

Sales of Previously-Owned Homes Unchanged

The National Association of Realtors® reported sales of previously-owned homes held steady in August, with homes sold at a seasonally-adjusted annual rate of 5.34 million sales. Analysts expected a reading of 5.37 million sales. Home sales have faced headwinds in recent years with high demand and low inventories of available homes driving up home prices faster than inflation and wage growth. Recently rising mortgage rates also impacted affordability and sidelined would-be buyers with moderate incomes.

Mortgage Rates Rise; New Jobless Claims Fall

Freddie Mac reported higher rates for fixed-rate mortgages with the average rate for a 30-year fixed rate mortgage rose five basis points to 4.65 percent. The average rate for 15-year mortgages also rose by five basis points to 4.11 percent. Rates for 5/1 adjustable rate mortgages dipped by one basis point to 3.92 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 201,000 claims filed as compared to expectations of 208,000 new claims filed and the prior week’s reading of 204,000 new claims filed. This was a 49-year low; analysts cited Hurricane Florence and overall economic expansion.

What‘s Ahead

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