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What’s Ahead For Mortgage Rates This Week – December 07, 2015

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Closing Paperwork: How to Read and Understand the Truth-in-Lending Disclosure Statement

Multiple economic reports released last week indicate further improvement in economic conditions. Pending home sales, construction spending and ADP payrolls increased while Non-farm Payrolls fell and the national unemployment rate held steady. The details:

Pending Home Sales, Construction Spending Increase

According to the Commerce Department, pending home sales increased by 0.20 percent in October as compared to September’s reading of -2.30 percent. Construction spending of 1.00 percent for October exceeded September’s reading of 0.60 percent growth and expectations that October’s reading would hold steady with a growth rate of 0.60 percent. Increased construction spending suggests that home builders may increase home building projects, which could relax tight inventories of available homes and ease demand for homes.

Mortgage Rates, New Jobless Claims Rise

Average mortgage rates fell last week according to Freddie Mac. The average rate for 30-year fixed rate mortgages fell by two basis points to 3.93 percent; average rates for 15-year fixed rate and 5/1 adjustable rate mortgages also fell by two basis points with readings of 3.16 percent and 2.99 percent respectively. Average discount points were 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for fixed rate mortgages. Average discount points for a 5/1 adjustable rate mortgage held steady at 0.50 percent.

New jobless claims rose last week with 269,000 new claims filed as compared to the prior week’s reading of 260,000 new claims and analysts’ expectations of 265,000 new claims. The level of new jobless claims neared levels not seen since 2000. The four week rolling average of new claims dropped by 1750 claims to a reading of 269,250 new claims filed. The four-week rolling average of new jobless claims is considered less volatile than weekly readings which can be impacted by holidays and other anomalies that can cause volatility.

Labor Reports Show Growth, Unemployment Rate Unchanged 

Hiring increases and lower layoffs have contributed to the lowest national unemployment rate since 2007. The national unemployment rate held steady at 5.00 percent. ADP reported 217,600 new jobs in November as compared to October’s reading of 196,000 new private sector jobs. Non-Farm Payrolls reported lower job growth of 211,000 jobs as compared to expectations of 200,000 jobs added and October’s reading of 298,000 jobs added. Non-Farm Payrolls covers government and private-sector jobs.

What’s Ahead

This week’s scheduled economic releases include reports on job openings, retail sales and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – November 30, 2015

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Whats Ahead For Mortgage Rates This Week November 30 2015

Although last week’s economic calendar was cut short by the Thanksgiving holiday, several housing-related reports were released. The FHFA reported on third quarter results for its Housing Market Index and the Commerce Department reported on new home sales for October. Freddie Mac released its weekly report on mortgage rates and data on new weekly jobless claims was also released.

FHFA, Commerce Department report Gains for Home Prices, New Home Sales

Home prices for mortgages associated with mortgages owned or backed by Fannie Mae and Freddie Mac increased 1.30 percent during the quarter ended September 30. This was the 17th consecutive seasonally adjusted quarterly increases for home prices based on sale-only transactions. FHFA home prices rose by 0.80 percent from the second to third quarter of 2015 and rose by 5.70 percent from third quarter 2014 to third quarter 2015 readings.

New home sales rose by a seasonally adjusted annual rate of 10.70 percent to 495,000 sales based on a downwardly revised September reading of 447,000 new home sales.

New home sales results were mixed according to the Commerce Department. Sales of newly built homes rose by an astounding 135.30 percent in the Northeast and increased by 8.90 percent in the South and by 5.30 percent in the Midwest. Sales of new homes declined in the West with a reading of -0.90 percent.

Home shoppers received good news as the median price of a new home fell 6 percent to $281,500. Inventory of new homes increased to its highest level since 2010. Higher inventory could ease demand and rapidly rising home prices associated with low supplies of new homes for sale.

Mortgage Rates Mixed, Jobless Claims Lower

Average mortgage rates varied last week according to Freddie Mac. 30-year fixed mortgage rates were two basis points lower at 3.95 percent; the average rate for a 15-year fixed rate mortgage was unchanged at 3.18 percent, and the average rate for a 5/1 adjustable rate mortgage was three basis points higher at 3.01 percent. Average discount points where 0.70 for a 30 year fixed rate mortgage and averaged 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

New jobless claims fell from the prior week’s reading of 272,000 new claims to 260,000 new claims. Analysts expected a reading of 270,000 new claims. The four-week rolling average of new jobless claims was unchanged at 271,000 after an adjustment to the prior week’s average of 270,750 new claims to a weekly average of 271,000 claims filed over the previous four weeks.

What’s Ahead

This week’s scheduled economic news includes reports on construction spending along with Labor Department releases on the national unemployment rate and Nonfarm Payrolls. Freddie Mac’s report on mortgage rates and weekly data on new jobless claims will be released as usual.

What’s Ahead For Mortgage Rates This Week – September 28, 2015

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Whats Ahead For Mortgage Rates This Week September 28 2015Last week’s scheduled economic news included reports on new and existing home sales, the FHFA House Price Index, weekly reports on mortgage rates, and new jobless claims. The week finished with a report on consumer sentiment.

Existing Home Sales Fall as New Homes Sales and Home Prices Rise

The National Association of Realtors reported that home sales for pre-owned homes fell in August. Analysts expected sales of existing homes to reach a reading of 5.52 million sales on an annual basis, but the actual reading was 5.31 million existing homes sold as compared to July’s reading of 5.58 million pre-owned homes sold. Rising home prices were cited as a primary reason for the drop in sales.

FHFA’s House Price Index for July reflected the trend of rising home prices; July’s reading was 0.60 percent as compared to June’s reading of a 0.20 percent increase in home prices associated with homes with mortgages owned by Fannie Mae or Freddie Mac.

Sales of newly built homes reached the highest level since early 2008 in August, evidence that demand for housing is strengthening heading into the fall. Home builder sentiment is at its highest level in nearly a decade according to a survey earlier this month from the National Association of Home Builders

Mortgage Rates Fall

Freddie Mac reported that average mortgage rates fell on Thursday; the rate for a 30-year fixed rate mortgage was 3.86 percent; the average rate for a 15-year mortgage was 3.08 percent and the rate for a 5/1 adjustable rate mortgage  dropped by one basis point to 2.91 percent. Discount points were 0.70, 0.60 and 0.50 percent respectively.

Jobless Claims Also Rise As Consumer Sentiment Fell.

The number of Americans seeking unemployment benefits rose slightly last week yet remained at a low level consistent with solid job growth. The Labor Department says weekly applications for jobless aid rose 3,000 to a seasonally adjusted 267,000. The four-week average fell to a 15-year low last month.

The University of Michigan says consumers lost confidence for the third straight month in September, worried about bad news about the global economy. Consumer sentiment index fell to 87.2 this month, lowest since October 2014 and down from 91.9 in August. Richard Curtin, Chief Economist for the survey, said consumers are worried about signs of weakness in the Chinese economy and continued stresses on Europe’s economies.

What’s Ahead

This week’s economic reports include Pending Home Sales, the Case-Shiller Home Price Index, Core Inflation, ADP Employment and the government’s Non- farm Payrolls report. The national unemployment rate and Consumer Confidence Index for September are also slated for release this week.

What’s Ahead For Mortgage Rates This Week – September 14, 2015

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Whats Ahead For Mortgage Rates This Week September 14 2015A short week after the Labor Day Holiday provided a slack schedule for economic news. Bloomberg reported that residential investment for the second quarter of 2015 represented 3.34 percent of the Gross Domestic Product. Compared to the long-term average reading of 4.56 percent, analysts said that the Q2 15 reading suggested pent-up demand in the housing market that could help propel the economy through any setbacks that could occur when the Fed raises rates.

Pent-Up Housing Demand a Plus when Fed Raises Rates

Job openings rose in July to 5.75 million as compared to June’s reading of 5.32 million. This is a positive indicator for the economy and for the housing sector, as consumer confidence in terms of buying a home typically relies on stable employment and a strong labor sector.

While economic indicators are looking good for housing construction, analysts note that a shortage of construction workers could affect construction of new residential units. Analysts said that children born during the 1980’s will lead the next wave of first-time home buyers, with millennials following. This trend could last for the next 10 to 15 years and is expected to bolster housing markets.

More lenient mortgage lending requirements and rising confidence among home builders were also cited as positive indicators for housing.

Mortgage Rates Mixed

Freddie Mac reported that average fixed mortgage rates rose by one basis point to 3.90 percent for 30-year fixed rate mortgages and 3.10 percent for 15-year mortgages. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.91 percent. Average discount points for a 30-year fixed rate mortgage were unchanged at 0.60 percent and rose to 0.70 percent for 15-year fixed rate mortgages and to 0.50 percent for 5/1 adjustable rate mortgages.

Job Openings Rise as Weekly Jobless Claims Fall

July job openings rose to 5.75 million from June’s reading of 5.32 million; this was the highest number of available jobs since records have been kept. Analysts said that the high number of job openings clearly indicate that the labor force is not able to supply the workers needed by employers. Jobs available range from professional to service related work; this suggests a universal trend rather than hiring challenges within specific job areas.

Hiring activity fell in July to 4.98 million from June’s reading of 5.18 million. July separations also fell, which suggests that employers are having problems finding skilled workers and are holding on to experienced workers.

Weekly jobless claims fell to 275,000 from the prior week’s reading of 281,000 new jobless claims.

What’s Ahead

Next week’s scheduled economic reports include Retail Sales, Consumer Price Index and Core CSI along with the NAHB Wells Fargo Housing Market Index, Commerce Department reports on housing starts and building permits. The Fed’s Federal Open Market Committee will issue its customary statement on Wednesday, followed by highly-anticipated press conference by Fed Chair Janet Yellen.

What’s Ahead For Mortgage Rates This Week – August 17, 2015

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What's Ahead For Mortgage Rates This Week August 17 2015Last week’s economic reports related to housing were few and far between other than weekly reports on new jobless claims and Freddie Mac’s mortgage rates survey.

Mortgage Rates Mixed, Jobless Claims Up

Freddie Mac reported that average mortgage rates rose for fixed rate mortgages and dropped for 5/1 adjustable rate mortgages. The average rate for a 30-year fixed rate mortgage rose by three basis points to 3.94 percent. The rate for a 15-year fixed rate mortgage rose by four basis points to 3.17 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.93 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and rose from 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.

Jobless claims rose to 274,000 last week from the prior week’s reading of 269,000 new jobless claims filed. Analysts expected a reading of 270,000 new jobless claims. New claims were lower by 1750 claims for the past month at a seasonally adjusted rate of 266,250 new jobless claims. This was the lowest level since April of 2000. Analysts consider the four week average a less volatile reading for new jobless claims than weekly readings, which fluctuate more due to transitory influences.

What’s Ahead

Next week’s scheduled reports include several releases related to housing. Expected releases include: the National Association of Homebuilders Housing Market Index, Commerce Department reports on Housing Starts and Building Permits and the National Association of Realtors® report on sales of previously owned homes.

What’s Ahead For Mortgage Rates This Week – July 6, 2015

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Whats Ahead For Mortgage Rates This Week July 6 2015

Last week’s housing-related economic events included the Case-Shiller Home Price Index reports for April, the Commerce Department’s Pending Home Sales report and a report on Construction Spending. In other economic news, Non-Farm Payrolls, the ADP Employment report and Consumer Confidence reports were released. Freddie Mac’s mortgage rates summary and the weekly unemployment claims report were released as usual.

Case-Shiller: Home Price Growth Slows in April

The Case-Shiller 20-City Home Price Index reported that year-over-year home prices slowed in April with a reading of 4.20 percent as compared to the March reading of 4.30 percent. David M Blitzer, chairman of the S&P Dow Jones Indices Committee, said that home prices continue to grow, but are not accelerating. According to the 20-City Index, home prices rose 1.10 percent from March to April and were bolstered by the onset of the spring selling season.

The Department of Commerce reported that pending home sales increased to their highest level in more than nine years in May. Pending home sales were 10.40 percent higher than they were in May 2014, which is a further indication of a stronger housing sector. Analysts consider pending home sales as an indicator of future closings and mortgage originations.

Construction Spending Lower, Mortgage Rates Higher

Construction spending dipped in May to 0.80 percent as compared to April’s reading of 2.10 percent; analysts had expected a reading of 0.50 percent in May. The outstanding news is that construction spending for manufacturing building is up by 70 percent year-over-year in May. While not directly connected to housing, this reading suggests that manufacturers are expanding their businesses and will likely expand hiring as well. Concerns over the labor market have kept many would-be home buyers on the sidelines, but improved hiring reports and wage increases are expected to compel more buyers to enter the housing market.

Freddie Mac’s weekly Primary Mortgage Market Survey brought another increase in average mortgage rates; the average rate for a 30 year fixed rate mortgage rose six basis points to 4.08 percent. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.24 percent and the average rate for a 5/2 adjustable rate mortgage rose by one point to 2.99 percent. Discount points for a 30-year fixed rate mortgage dropped from 0.70 percent to 0.60 percent and were unchanged for 16-year fixed rate mortgages at 0.60 percent and 0.40 percent for a 5/1 adjustable rate mortgage.

Non-Farm Payrolls Lower; ADP Employment

The Bureau of Labor Statistics reported that Non-farm Payrolls dropped to a reading of 223,000 new jobs added as compared to expectations of 225,000 new jobs added and 254,000 new jobs added in May. The ADP employment report, which tracks private-sector hiring, fared better with 237,000 new jobs posted as compared to 203,000 new private sector jobs added in May.

Weekly Jobless Claims Rise to Highest Level in Five Weeks

New claims for unemployment reached their highest reading in five weeks with 281,000 new claims filed against expectations of 275,000 new claims filed and the previous week’s reading of 271,000 jobless claims filed. The four week rolling average of new claims filed showed an increase of 1000 more claims filed for a reading of 274,750 new claims filed. Analysts said that new jobless claims remained below the 300,000 benchmark for the 17th consecutive week.

The Commerce Department reported that the National Unemployment Rate was lower at 5.30 percent as compared to an expected reading of 5.40 percent and May’s reading of 5.50 percent. June’s national unemployment rate was the lowest reading since 2008 and is a good sign that labor markets are steadily if slowly improving.

No economic reports were released Friday due to the Fourth of July holiday.