SJ Real Estate

What’s Ahead For Mortgage Rates This Week – July 13, 2020

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What's Ahead For Mortgage Rates This Week - July 13, 2020Last week’s scheduled economic news included readings on consumer credit, job openings, jobless claims, and mortgage rates.

Consumer Borrowing Declined at Slower Pace in May

According to Federal Reserve data, consumer borrowing fell at a slower annual pace of -5.30 percent in May as compared to April’s reading of -20 percent. Non-revolving consumer credit, which includes vehicle and student loans, increased by 2.30 percent in May. The Federal Reserve does not report on real estate loans.

Federal assistance programs including the first round of stimulus checks, additional unemployment payments and support for businesses contributed to better readings for the economy in May, but last week’s rising coronavirus cases may cause all or part of economic gains to be lost as local governments reverse decisions to reopen businesses and local government services.

Job Openings Rise  in May as Weekly Jobless Claims Fall

The Bureau of Labor Statistics reported 5.40 million job openings in May as compared to April’s 5.00 million job openings. Rising job openings coincided with reopening business and government services as state and local authorities eased stay-at-home requirements and began easing restrictions on economic activity.

Weekly jobless claims were also lower than for the preceding week. 1.31 million initial jobless claims were filed last week as compared to the prior week’s reading of 1.41 million first-time claims filed. Ongoing jobless claims fell to 18.10 million claims from the prior week’s reading of 18.80 million continuing jobless claims. Jobless claims remained much higher than pre-pandemic readings.

Mortgage Rates Drop to Record Lows

Freddie Mac reported the lowest recorded average mortgage rates as rates for fixed-rate mortgages dropped by four basis points to 3.03 percent for 30-year fixed-rate mortgages and fell by five basis points to 2.51 percent for 15-year fixed-rate mortgages. The average rate for 5/1 adjustable rate mortgages rose two basis points to 3.02 percent; discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The U.S. Senate is expected to work on its version of the next Coronavirus relief package next week; it should be completed by the end of July or in early August.

What’s Ahead

This week’s scheduled economic news includes reports on housing markets, housing starts, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – November 18th, 2019

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What’s Ahead For Mortgage Rates This Week – November 18th, 2019Last week’s economic reporting included readings on inflation, testimony by Federal Reserve Chair Jerome Powell, and weekly readings on mortgage rates and new unemployment claims.

Rising Gas Prices Fuel Jump in Inflation

Consumer inflation increased at its fastest pace in seven months according to the Consumer Price Index for October. Consumer prices rose 0.40 percent and exceeded analysts’ forecast of 0.30 percent and September’s reading of 0.00 percent inflationary growth.  Analysts attributed the jump in prices to rapidly rising gasoline prices.

October’s reading for core inflation, which excludes fuel and food prices, supported this view. Core inflation grew by 0.20 percent in October, which matched expectations and exceeded September’s core inflation reading of 0.10 percent.

Year-over-year inflation rose from 1.70 percent to 1.80 percent; this was lower than the top year-over-year reading that approached 3.00 percent.

Fed Chair Says Interest Rates on Hold Unless Economy Deteriorates

In testimony before the Joint Economic Committee of Congress, Fed Chair Jerome Powell said,: “We see the current stance of monetary policy to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market,  and inflation near our symmetric rate of 2.00 percent.”

Mr. Powell said that Federal Reserve Policy is flexible and subject to adjustment as required by future news and economic events. The benchmark Federal Funds rate range is currently 1.50 percent to 2.00 percent.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose six basis points to 3.25 percent. Rates for 15-year fixed-rate mortgages rose seven basis points to 3.20 percent;  the average rate for 5/1 adjustable-rate mortgages rose five basis points to 3.44 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.

225,000 first-time jobless claims were filed last week; this exceeded expectations of 210,000 new claims and the prior week’s reading of 211,000 new jobless claims filed. Analysts said the spike in new claims was caused by seasonal anomalies and not by layoffs. New jobless claims are likely to fall as the holiday season approaches and seasonal hiring picks up.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market conditions; the Commerce Department readings on housing starts and building permits issued. Readings on sales of pre-owned homes and consumer sentiment will also be released along with weekly reports on mortgage rates and new jobless claims.

What’s Ahead For Mortgage Rates This Week – November 4th, 2019

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What’s Ahead For Mortgage Rates This Week – November 4th, 2019Last week’s economic reports included readings from Case-Shiller on home prices, pending home sales data and the post-meeting statement announcement from the Fed’s Federal Open Market Committee were released.

Labor sector reports on jobs and the national unemployment rate were also released. Weekly readings on mortgage rates and initial jobless claims were also published.

Case-Shiller: Home Price Growth Slows in August

Home price growth slowed by 0.20 percent in August for the first time since August 2018. Home price growth rates typically decrease in August as peak home-buying season passes. The Case-Shiller 20-City Home Price Index showed a geographical shift away from the West and Southwest in August as two of the three cities with the highest home price growth rates were in the Southeast.

Home prices in Phoenix, Arizona held the top spot in the 20-City Home Price Index with a seasonally-adjusted annual growth rate of 6.30 percent. Home prices in Charlotte, North Carolina and in Atlanta, Georgia rose 4.50 and 4.00 percent.

Pending home sales rose 1.50 percent in September according to the National Association of Realtors®. Pending home sales gauge future closed sales and mortgage loan volume.

Fed Lowers Key Interest Rate Range

The Federal Reserve announced its third consecutive cut to its benchmark interest rate range but indicated that future rate cuts may be on hold. Fed policymakers cut the federal funds rate range one-quarter percent to 1.50 to 1.75 percent from 1.75 percent to 2.00 percent.

Federal Open Market Committee members said global economic developments and muted inflationary pressure were considerations in the decision to lower the Fed’s key interest rate range.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week; rates for a 30-year fixed-rate mortgage rose eight basis points and averaged 3.78 percent. Rates for 15-year fixed-rate mortgages rose one basis point and averaged 3.19 percent.

Rates for 5/1 adjustable-rate mortgages rose three basis points to 3.43 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable-rate mortgages averaged 0.40 percent.

First-time jobless claims rose by 5000 claims to 218,000 new claims filed. The national unemployment rate rose to 3.60 percent in October as compared to September’s reading of 3.50 percent. ADP reported 125,000 private-sector jobs added in October as compared to 93,000 jobs added in September. 128,000 public and private sector jobs were added in October according to the government’s Non-Farm Payrolls report.

What’s Ahead

This week’s scheduled economic news includes readings on job openings and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – October 28th, 2019

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What’s Ahead For Mortgage Rates This Week – October 28th, 2019Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.

New Home Sales Dip in September

Commerce Department readings indicated fewer sales of new homes than in August. 701,000 sales were reported in September on a seasonally-adjusted annual basis; 706,000 new homes were sold in August and analysts expected 700,000  sales of new homes.

Sales fell by 0.70 percent month-to-month but were 15.50 percent higher year-over-year. September was the second time in 12 years that new home sales exceeded 700,000 in consecutive months.

Sales of new homes were lower in three of four regions. Sales fell by -2.80 percent in the Northeast and were -3.80 percent lower in the West.  New home sales fell -0.20 percent in the South but rose + 6.30 percent in the Midwest. The median sale price of new homes fell in September, which indicated that builders may be building more affordable homes. 

In recent years, builders concentrated on building high-end homes. Real estate pros said there was a 5.50 month supply of new homes available in September as compared to the benchmark reading of a six month supply of homes for sale that indicates markets are balanced between home buyers and sellers.

Sales of pre-owned homes also fell in September.5.38 million previously-owned homes were sold on a seasonally-adjusted annual basis. Analysts expected 5.40 million sales and  5.50 million pre-owned homes were sold in August.

Mortgage Rates Rise;   Initial Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week as the average rate for a 30-year fixed-rate mortgage rose six basis points to 3.75 percent. The average rate for a 15-year fixed-rate mortgage rose three basis points to 3.18 percent. 

Rates for 5/1 adjustable rate mortgages averaged 3.40 percent and were five basis points higher. Discount points averaged 0.50 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims fell last week; 212,000  first-time claims were filed. Analysts expected 215,000 claims based on the prior week’s reading of 218,000 initial claims. Analysts said there were no indications of rising layoffs and noted that new jobless claims stayed near a 50-year low.

October’s Consumer Sentiment Index fell to an index reading of 95.50 as compared to September’s reading of 96.00. Consumers surveyed were less anxious about trade disputes with China than in September. 

Readings for the University of Michigan’s consumer sentiment index have held steady in recent months, but remain below the post-recession peak reading of 101.40.

What’s Ahead

This week’s scheduled economic news includes readings from Case-Shiller on home prices and a statement from the Fed’s Federal Open Market Committee on monetary policy decisions. 

The Labor Department also reports on Non-Farm Payrolls and national unemployment is also scheduled along with weekly readings on mortgage rates and first-time jobless claims.

What’s Ahead For Mortgage Rates This Week – July 22nd, 2019

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What’s Ahead For Mortgage Rates This Week – July 22nd, 2019Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, Commerce Department reports on housing starts and building permits issued.

The University of Michigan consumer sentiment index was also released. Weekly readings on mortgage rates and new jobless claims were also reported.

NAHB: Builder Confidence Rises as Housing Starts Slip

Home builder confidence in current market conditions rose one point to an index reading of 65 in June. Any reading over 50 means that most builders view housing markets conditions as positive, but July’s reading was lower year-over-year.

Builders have long cited a shortage of buildable lots and labor, but also face new obstacles including strict local zoning laws and overall regulation. High demand for affordable homes coupled with short supplies of homes in this market range provided challenges to home builders, communities and would-be home buyers.

Housing starts fell in June to 1.125 million on a seasonally-adjusted annual basis. Analysts predicted 1.244 million starts based on May’s reading of 1.265 million starts. The housing market index used to foreshadow the number of housing starts, but the two readings are no longer as closely connected.

The Commerce Department reported 1.220 million building permits issued in June as compared to 1.299 million permits issued in May.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week after three weeks of minor movement. Rates for 30-year fixed rate mortgages averaged six basis points higher at 3.81 percent. The average rate for 15-year fixed rate mortgages rose one basis point to 3.23 percent.

5/1 adjustable rate mortgage rates averaged two basis points higher at 3.48 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 averaged 0.40 percent.

New jobless claims rose to 216,000 new claims filed as compared to 208,000 new claims filed the prior week. Analysts predicted 220,000 first-time claims would be filed. The University of Michigan’s Consumer Sentiment Index rose in July to 98.40 percent as compared to June’s reading of 98.20. Analysts expected a reading of 99.00.

What‘s Ahead

This week’s scheduled economic news includes readings on sales of new and previously-owned homes along with weekly reports on mortgage rates and new jobless claims.

What’s Ahead For Mortgage Rates This Week – January 22nd, 2019

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What’s Ahead For Mortgage Rates This Week – January 22nd, 2019Last week’s economic reports included National Association of Home Builders’ Housing Market Index, the Federal Reserve’s Beige Book report and the University of Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and first-time jobless claims were also released.

Commerce Department readings on housing starts and building permits issued were delayed due to the federal government shutdown, which continued and became the longest government shutdown on record.

NAHB: Builder Confidence Rises Amid Headwinds

Home builder confidence rose two points in January according to the National Association of Home Builders. Builder concerns over rising construction costs and tariffs on building materials were balanced by falling mortgage rates.

Builders felt pressure to create more affordable homes and to offer incentives to buyers that could create more sales. Building new homes is the only solution to the long-entrenched shortage of homes; the Home builder index is closely watched by housing and mortgage industry pros as an indicator of future home inventories and mortgages.

Federal Reserve Beige Book Shows Concern Over Current Economic Conditions

The Federal Reserve’s Beige Book report, which recounts Federal Reserve business contacts’ views of the economy included information from eight of twelve Federal Reserve districts. Business leaders cited higher costs including rising tariffs and costs for supplies. Business growth was slower during December and early January.

Additional concerns cited by the Fed’s business contacts included the government shutdown and conflicts over trade and political policies. Fed contacts reported mixed results with passing on higher costs to consumers. This suggests that consumers are “tapped out,” or are reining in spending among worries over the shutdown and rising costs.

Mortgage Rates Mixed, New Jobless Claims

Freddie Mac reported mixed activity on mortgage rates last week as the average rate for 330-year fixed rate mortgages was unchanged at 4,45 percent. The average rate for a 15-year fixed rate mortgage ticked down one basis point to 3.88 percent. The average rate for 5/1 adjustable rate mortgage rose four basis points to 3.37 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Fewer first-time jobless claims were filed last week with 213,000 new claims filed as compared to expectations of 220,000 new claims filed and 216,000 first-time claims filed in the prior week.

The University of Michigan released its consumer confidence index for January; consumer uncertainty about economic conditions and the government shutdown caused January’s reading to fall nearly eight points to 90.70. from December’s reading of 98.30 Analysts expected a reading of 97.50, but this may have been based in hopes that the government shutdown would end.

What‘s Ahead

This week’s economic reports are limited by Monday’s holiday and the ongoing government shutdown. Expected readings include sales of new and pre-owned homes along with weekly readings on mortgage rates and new jobless claims.