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What’s Ahead For Mortgage Rates This Week – November 25th, 2019

November 25, 2019 by Barbara Bodnar

What's Ahead For Mortgage Rates This Week - November 25th, 2019Last week’s scheduled economic news releases included readings on builder sentiment from the National Association of Home Builders and. Commerce Department data on housing starts and building permits issued.

The National Association of Realtors® reported on sales of previously owned homes and the University of Michigan issued its monthly report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.

NAHB: Builder Sentiment Dips in November

Home builders were less optimistic about housing market conditions in November; the National Association of Home Builders Housing Market Index dipped by one point to an index reading of 70 for November. October’s reading of 71 was the highest in 20 months. Any reading over 50 indicates that most builders surveyed were positive about market conditions.

Sub-readings used to calculate the NAHB Housing Market Index reading were mixed. Builder confidence in market conditions for the next six months rose one point to 77, but builder sentiment dipped two points to 76 for current market conditions. Builder sentiment about buyer traffic in new housing developments dipped one point to 53; buyer traffic readings rarely exceed a reading of 50.

Relatively low mortgage rates helped offset builder concerns over tariffs on building materials, but pending winter weather conditions likely impacted lower builder enthusiasm over housing market conditions.

Commerce Department Reports Increased Housing Starts, Building Permits Issued

Housing starts and building permits rose in October; Housing starts rose to 1.314 million starts on a seasonally-adjusted annual basis as compared to September’sreading of 1.266 million starts.

Building permits issued increased from September’s reading of 1.391 million permits issued to October’s reading of 1.461 million permits issued. Building permits issued for new homes in October reached their highest level since the recession. Ongoing shortages of available homes continued to boost demand for homes; any increase in new construction helps balance supply and demand for homes.

Sales of previously-owned homes fell short of expectations with a reading of 5.46 million sales at a seasonally-adjusted annual rate in October; analysts expected a pace of 5.47 million sales based on September’s reading of 5.36 million sales. Year-over-year sales of previously-owned homes rose 4.60 percent.

Supplies of available homes continued to fall according to the National Association of Realtors® as inventories slipped to a 3.9 months supply in October. Real estate pros consider a six-months supply of homes as a healthy balance between available homes and home buyers.

Mortgage Rates, New Jobless Claims

Freddie Mac reported lower average mortgage rates last week; rates for 30-year fixed-rate mortgages fell nine basis points to 3.66 percent. Rates for 15-year fixed-rate mortgages averaged 3.15 percent and were five basis points lower.

The average rate for 5/1 adjustable rate mortgages also fell five basis points to 3.39 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.50 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.

New jobless claims were expected to drop to 218,000 claims filed but held steady at the prior week’s reading of 227,000 first-time claims filed.

The University of Michigan Consumer Sentiment Index rose to an index reading of 96.80 for November; analysts expected the reading to hold steady at October’s reading of 95.70 percent.

What’s Ahead

This week’s scheduled economic reports include readings on home prices from Case-Shiller; reports on new and pending home sales and a speech by Fed chair Jerome Powell. Weekly reports on mortgage rates and new jobless claims will also be released.

Financial Reports Tagged: Housing Starts, Interest Raes, Mortgage Rates

What’s Ahead For Mortgage Rates This Week – April 1st, 2019

April 1, 2019 by Barbara Bodnar

What’s Ahead For Mortgage Rates This Week – April 1st, 2019Last week’s economic reports included readings from Case-Shiller on home price growth, Commerce Department readings on housing starts and building permits issued. The Conference Board issued its monthly reading on consumer confidence. Pending home sales and weekly reports on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Indices: Price Growth Slows in January

S&P Case-Shiller Indices reported the slowest rate of home price growth in six years. January readings suggested that home price growth slowed due to easing demand. Affordability concerns sidelined buyers; participation of first-time home buyers remained lower than average.

Case-Shiller’s 20-City Home Price Index charted its third month-to-month decline in home price growth; the National Home Price Index fell to 4.30 percent during the three months ending in January as compared to 4.60 percent growth for the three month period ending in October 2018.

Las Vegas, Nevada led the 20-City Home Price Index with year-over-year home price growth of 10.50 percent. Phoenix, Arizona held second place with 7.50 percent home price growth. Third place was tied by Minneapolis, Minnesota, Charlotte, North Caroline and Tampa, Florida with 5.10 percent growth. This tie suggested that home prices were leveling out, and west coast cities were notably absent from the top three spots after home prices rocketed to historic levels in recent years.

Housing Starts, Building Permits Issued

Commerce Department readings for housing starts and building permits issued were lower in February. Housing starts posted on a seasonally-adjusted annual rate of 1.162 million starts. Analysts expected 1.201 million starts based on February’s reading of 1.273 million housing starts. Single-family housing starts fell 17 percent in March.

Regional readings for housing starts were mixed: The Northeast reading was 30 percent lower; the Southern region posted 7 percent fewer starts in February and housing starts in the West fell 19 percent. The Midwest posted a positive year-over-year growth rate of 27 percent for housing starts.

Fewer building permits were issued in February with 1.295 million permits issued as compared to February’s reading of 1.317 million permits issued. While some of the slowdowns in housing starts and building permits were likely related to winter weather, real estate and mortgage lending pros continued to count on home builders to provide more homes to ease housing shortages in many cities and metro areas.

Pending home sales were lower in February; the National Association of Realtors® said pending sales were 1.00 percent lower in February, and those pending sales had declined nearly 5.00 percent year-over-year. Pending sales represent home sales for which purchase offers have been signed, but not completed.

Lawrence Yun, the chief economist for the National Association of Realtors®, said a shortage of available homes in the West coupled with rapidly rising home prices contributed to lower pending sales numbers.

Mortgage Rates, New Jobless Claims Fall

Average mortgage rates fell to their lowest readings in ten years last week. Freddie Mac reported that rates for a 30-year fixed rate mortgage averaged 22 basis points lower at 4.06 percent; the average rate for 15-year fixed rate mortgages fell 14 basis points to 3.57 percent. Rates for 5/1 adjustable rate mortgages averaged 3.75 percent and were 9 basis points lower.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Lower mortgage rates are expected to prevail as the Fed announced its decision not to raise the target federal funds rate range in 2019.

Consumer confidence fell to an index reading of 124.1 in February as compared to 131.4 in January. Analysts expected an index reading of 133, which indicates that consumers have less confidence in current economic conditions.

What‘s Ahead

This week’s scheduled economic news includes readings on retail sales, construction spending and labor sector reports on jobs and national unemployment. Weekly reports on mortgage rates and first-time jobless claims will also be released.

Financial Reports Tagged: Financial Reports, Housing Starts, Interest Rates

What’s Ahead For Mortgage Rates This Week – July 20, 2015

July 20, 2015 by Barbara Bodnar

Whats Ahead For Mortgage Rates This Week July 13 2015Last week’s economic news included an encouraging report from the National Association of Home Builders, whose housing market index held steady with a reading of 60 in July. This was the 13th consecutive month for readings over 50, which indicate that more builders are confident about housing markets than those who are not. July’s reading was noteworthy as it was the highest since November 2005 prior to the recession.

Housing Starts, Building Permits Increase

The Commerce Department provided further evidence of stronger housing markets with reports on housing starts and building permits issued in June. Housing starts rose from May’s reading of 1.07 million to 1.17 million, which surpassed the expected reading of 1.11 million housing starts.

May’s reading for housing starts was revised from 1.04 million to 1.07 million an annual basis.

Construction of apartments and other multifamily housing complexes attained their highest level since 1987, which supports reported trends that millennials who prefer to live in larger cities are renting rather than buying homes. Housing starts gained nearly 10 percent between May and June. Would-be home buyers are also renting due to tighter mortgage approval standards; others may be “sitting on the fence” as they wait for further indications of stronger labor markets and improvements in overall economic conditions.

Building permits issued in June supported trends in housing starts, with permits for multi-family housing units higher by 16. 10 percent and was the highest reading for multi-family building permits since 1990. Analysts said that the increase in multifamily building permits was in caused by the pending expiration of a tax credit for builders in New York State that was set to expire June 30.

Permits for single family homes rose only 0.90 percent in June, to an annual pace of 689,000 but this was still the highest reading for single family housing permits since 2008.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage averaged 4.09 percent and was higher by five basis points. The average rate for a 15-year mortgage was also five basis points higher at 3.25 percent. The average rate for a 5/1 adjustable rate mortgage was up by three basis points to 2.96 percent. Discount points were 0.60 percent for 15 and 30 year mortgages and 0.50 percent for 6/1 adjustable rate mortgages.

New jobless claims fell to 281,000 last week against the prior week’s reading of 296,000 new claims and an expected reading of 285,000 new jobless claims. Analysts said that the current reading indicates that last week’s spike in new unemployment claims was a false alarm. Seasonal anomalies and re-tooling at some auto plants were cited as causes for the prior week’s high reading. New jobless claims have remained under the benchmark reading of 300,000 since February for the longest consecutive period in 15 years.

Last week’s reports ended with the University of Michigan’s Consumer Sentiment Index, which fell from June’s reading of 96.1 to 93.3; analysts expected a reading of 95.0.

What’s Ahead

Scheduled economic reports for next week include new and existing home sales, and FHFA home prices along with weekly reports on mortgage rates and new jobless claims.

Market Outlook Tagged: Freddie Mac, Housing Starts, NAHB, National Association of Home Builders

Barbara Bodnar
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