What’s Ahead For Mortgage Rates This Week – April 16th, 2018

What’s Ahead For Mortgage Rates This Week – April 16th, 2018Last week’s economic reports included readings on inflation, the minutes of the most recent meeting of the Fed’s Federal Open Market Committee and weekly reports on mortgage rates and first-time jobless claims. The University of Michigan released its Consumer Sentiment Index for April.

Inflation Grows, Fed Indicates Future Rate Hikes Likely

The minutes of the Federal Open Market Committee Meeting held March 20 and 21 indicate Fed policymakers are likely to increase the target federal funds rate at their June meeting. Economic indicators including strong labor markets and low unemployment rate were cited as contributing to expectations for federal rate hikes throughout 2018.

How the Fed moves on interest rates affects private sector interest rates as financial institutions typically follow the Fed’s lead regarding raising or not raising consumer lending and mortgage rates.

FOMC minutes said that members noted increasing consumer credit card balances, but also said that sub-prime borrowers continued to have trouble in getting adequate credit at favorable interest rates.

Mortgage Rates Hold Steady, New Jobless Claims Dip

Mortgage rates were little changed last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose two basis points to an average of 4.42 percent; the average rate for a 15-year fixed rate mortgage was unchanged at 3.87 percent.

Rates for a 5/1 adjustable rate mortgage averaged one basis point higher at 3.61 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower last week with 223,000 claims filed; analysts expected 230,000 new claims filed based on the prior week’s reading of 242,000 new claims filed. In other news, the University of Michigan released its Consumer Sentiment Index with an index reading of 97.8 for April. Analysts expected a reading of 101.8, which was based on the March reading of 101.4

Consumers surveyed were fearful of possible trade wars resulting from recent tariffs on foreign goods; the consumer sentiment index dipped from its March reading of 101.4 to 97.8. Builders have said that tariffs will increase prices on building materials and such increases would drive home prices up.

Whats Ahead

This week’s scheduled economic releases include readings on builder sentiment from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued and readings on retail sales. Weekly reports on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – April 2nd, 2018

What's Ahead For Mortgage Rates This Week April 2nd, 2018  Last week’s economic releases included readings from Case-Shiller, pending home sales, and consumer sentiment. Weekly reports on mortgage rates and first-time jobless claims were also released.    

Case-Schiller: Home Prices Continue to Rise

According to Case-Shiller Home Price Index reports for January, U.S. home prices continued to rise at a rapid pace with the national home price index rising at a seasonally-adjusted annual rate of 6.20 percent. Case-Shiller’s 20-City Home Price Index rose by 6.40 percent year-over-year. Seattle, Washington held the top spot with year-over-year home price growth of 12.90 percent.

Las Vegas, Nevada reported year-over-year home price growth of 11.20 percent. After a lull in home price growth, San Francisco, California home prices grew by 10.20 percent year-over-year. The only city to lose ground in the 20-City Index was Washington, D.C., which posted a drop of 0.40 percent in January, but posted a year-over-year gain of 2.40 percent.

David M. Blitzer, Chairman of the Dow Jones S&P Indices Committee, said that rapidly rising home prices were all about supply and demand. Growing demand and slim supplies of homes for sale were again cited as the primary reason for rapidly rising home prices. Faced with limited choices and rising mortgage rates, more buyers could be sidelined until demand subsides or inventories of available homes increase.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported slight drops in average mortgage rates last week. 30-year mortgage rates dropped by one basis point to 4.44 percent; 15-year mortgage rates averaged one basis point lower at 3.90 percent, and rates for 5/1 adjustable rate mortgages also dropped by one basis point to 3.66 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 last week with 215,000 new claims filed. Analysts expected 230,000 new claims to be filed based on the prior week’s reading of 227,000 new claims filed.

Consumer Sentiment dipped lower in March with an index reading of 101.4, which fell below expectations of 102.0 and February’s index reading of 102.0.

Whats Ahead

This week’s scheduled economic reports include readings on construction spending, and labor-related readings on ADP payrolls, Non-Farm payrolls and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – March 12th, 2018

What’s Ahead For Mortgage Rates This Week – March 12th, 2018Last week’s economic releases included reports on Non-Farm Payrolls, ADP payrolls, and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims were also released.

Public and Private Sector Jobs Show Mixed Readings

ADP Payrolls reported 235,000 private sector jobs added in February as compared to January’s updated reading of 243,000 jobs added. Analysts estimated 205,000 private sector jobs would be added, but this was based on the original reading of 234,000 jobs added. February was the fourth consecutive month when private sector job growth exceeded 200,000 jobs.

According to the federal government, Non-Farm payrolls added 74000 public and private-sector jobs in February for a reading of 313,000 jobs added. February’s gain was the largest in a year and a half. Analysts expected 222,000 jobs added in February. Analysts cited solid economic strength as contributing to higher-than-expected job growth.

Strong economic growth can encourage prospective home buyers to move from renting to buying a home, but first-time and moderate-income buyers continued to face headwinds including short supplies of available homes and strict mortgage requirements. Rising mortgage rates have also impacted buyers’ ability to qualify for mortgage loans.

National unemployment was unchanged at 4.10 percent.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose again last week; the average rate for a 30-year fixed rate mortgage gained three basis points to 4.46 percent. 15-year fixed rate mortgage rates rose by four basis points to 3.94 percent. 

The average rate for a 5/1 adjustable rate mortgage rose by one basis point to 3.63 percent. Discount points held steady at 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 231,000 new claims filed as compared to an expected reading of 220,000 new claims and the prior week’s reading of 210,000 first-time claims filed. 

Analysts said that job growth remains robust regardless of higher first-time jobless claims. While layoffs rose in February, analysts said that anomalies including bad weather made it difficult to project February readings for first-time jobless claims.

Whats Ahead

This week’s scheduled economic releases include readings from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued and the University of Michigan’s report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – January 29, 2018

Last week’s economic news included releases on new and existing home sales along with weekly readings on mortgage rates and first-time jobless claims.

Home Sales Fall Due to Slim Supply of Homes

December sales of previously-owned homes dipped to an 18-year low with a reading of 5.57 million sales on a seasonally-adjusted annual basis. Pre-owned home sales were expected to reach 5.73 million homes based on November’s downwardly- revised reading of 5.78 million sales. December sales were 3.6 percent lower month-to-month, but were 1.10 percent higher year-over-year.

Analysts credited the shortage of sales to tight inventories of homes for sale. Low inventories of homes for sale have worsened, a situation that sidelines would-be buyers due to the slim selection of homes, rapidly rising prices and buyer competition.

Lawrence Yun, Chief Economist of the National Association of Realtors, said that December sales were lower in all four regions tracked by his organization. The Northeast had 7.50 percent fewer sales; The Midwestern region has 6.30 percent fewer sales in December and the South and West had 1.70 percent and 1.60 percent fewer sales.

Available homes reached a 3.20-month supply; the National Association of Realtors typically views a six-month supply of available homes as average. The national median home price was $246,800 in December and was 5.80 percent higher year-over-year.

Sales of new homes were also significantly lower in December, at an annual rate of 625,000 sales. Analysts expected 679,000 sales and November’s reading showed a sales pace of 689,000 sales.

New Home Sales Fall in December

Sales of new homes were lower in December but were strong overall for 2017. The Commerce Department reported 625,000 sales of new homes for December as compared to expectations of 680,000 sales and November’s downwardly revised reading of 689,000 sales of new homes.

The annual sales pace of new homes was 9.30 percent lower in December than in November, but the sales price of new homes increased 14.10 percent year-over-year. The median price of a new home was $335,400, which was 2.50 percent higher year over year. A 5.6 month supply of new homes for sale reflected healthy market conditions for new homes.

Mortgage Rate, New Jobless Claims Higher

Mortgage rates rose for the third consecutive week with the average rate for a 30-year fixed rate mortgage 11 basis points higher at 4.15 percent; the average rate for a 15-year fixed rate mortgage was 3.62 percent and was 13 basis points higher. 5/1 adjustable rate mortgages averaged 3.52 percent and rose by six basis points. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Higher mortgage rates were attributed to an increase in the 10-year Treasury yield, which was at its highest rate since 2014.

First-time jobless claims rose last week after reaching a 45-year low the previous week. 233,000 new claims were filed last week; analysts expected a reading of 240,000 new claims filed against the previous week’s reading of 216,000 new jobless claims filed. Bad weather, two holidays in January and seasonal layoffs at the end of the holiday shopping season contributed to the increase in new jobless claims.

Whats Ahead

This week’s scheduled economic reports include readings from Case-Shiller Home Price Indexes, homeownership rates, and inflation. The Bureau of Labor Statistics will release monthly reports on private and public-sector jobs and the national unemployment rate. Weekly readings on mortgage rates and first-time jobless claims will also be released.

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

Last week’s economic news included readings on home builder confidence, housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims were also released; the week wrapped with the University of Michigan’s report on consumer sentiment.

Home Builder Confidence Dips, Remains in Positive Territory

According to the National Association of Home Builders, builder confidence dropped two points in January to 72, but high demand for homes continued to provide builders with positive outlooks on housing market conditions. While continued concerns over labor and lot shortages were cited, home builders surveyed for January’s Housing Market Index said that High demand for homes and recent tax legislation kept more builders confident than those who were not. Any reading over 50 indicates positive builder sentiment.

Housing Starts, Building Permits Fall in December

Housing starts fell 8.20 percent in December according to the Commerce Department. 1.192 million starts were forecast on a seasonally- adjusted annual basis; analysts expected a reading of 1.280 million starts based on November’s reading of 1.299 million starts. 1.302 million building permits were issued in December on a seasonally-adjusted annual basis. November’s reading was higher at 1.303 million building permits issued.

Mortgage Rates Rise, New Jobless Claims

Freddie Mac reported higher mortgage rates for the second week in a row. The average rate for a 30-year fixed rate mortgage rose five basis points to 4.04 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.49 percent and the average rate for a 5/1 adjustable rate mortgage was unchanged at 3.46 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 averaged 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower with 220,000 new claims filed as compared to estimates of 250,000 new claims. 261,000 new claims were filed the prior week. Consumer sentiment was lower in January with an index reading of 94.40. Analysts expected the consumer sentiment index to reach 98.00, based on December’s reading of 95.90 percent, but uncertainty over tax benefits connected with recent legislation and rising interest rates contributed to the lowest consumer sentiment index reading since July.

Whats Ahead

This week’s scheduled economic reports include readings on new and existing home sales along with weekly readings on mortgage rates and first-time jobless claims.

What’s Ahead For Mortgage Rates This Week – January 16, 2018

Last week’s economic releases on inflation, core inflation, and retail sales. Weekly readings on mortgage rates and new jobless claims were also released.

Inflation and Retail Sales Ease in December

Consumer prices fell from November’s reading of 0.40 percent growth to o.10 percent growth in December, which matched expectations. The Core Consumer Price Index, which excludes volatile food and energy prices, dropped to 0.30 percent from November’s growth rate of 0.40 percent. Analysts expected a Core CPI reading of 0.20 percent for December.

Retail sales were lower in December as compared to November’s reading of 0.90 percent growth month-to-month; December’s retail sales grew by 0.40 percent. Core retail sales, which excludes automotive sales grew by 0.40 percent in December as compared to November’s growth rate of 0.90 percent. Analysts expected retail sales to increase by 0.50 percent. Retail sales excluding automotive sales also grew by 0.40 percent as compared to an expected reading of 0.30 percent and November’s growth rate of 1.30 percent.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week with rates for a 30-year fixed rate mortgage averaging four basis points higher at 3.99 percent. Mortgage rates for a 15-year fixed rate mortgage were six basis points higher at an average of 3.44 percent. The average rate for a 5/1 adjustable rate mortgage was one basis point higher at an average of 3.46 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 rose to 268,000 filings as compared to 248.000 new claims expected and 258,000 new jobless claims filed the prior week. Last week’s new jobless claims.

Whats Ahead

This week’s economic releases include readings from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued and a report on consumer sentiment from the University of Michigan.

What’s Ahead For Mortgage Rates This Week – January 8, 2018

Last week’s economic reports included readings on construction spending, minutes of the most recent meeting of the Fed’s Federal Open Market Committee. Labor reports including ADP, Non-Farm Payrolls, and national unemployment were released along with weekly readings on mortgage rates and new jobless claims.

Construction Spending Rises; Driven by Residential Building

Residential construction drove November construction spending surpassed expectations of a 0.50 percent increase; Overall, construction spending rose by 0.80 percent in November. Residential construction was up 7.90 percent year-over-year. Single-family home construction rose 8.90 percent year-over-year. Rising rates of single-family construction is good news for homebuyers, who have faced obstacles due to short inventories of available homes. Analysts expected Q4 2017 construction pace to be the highest since Q1 2016.

While more homes for sale could help ease rapidly rising home price, rising mortgage rates could sideline first-time and moderate-income buyers, but Fed policymakers had mixed opinions about raising the federal funds rate forecast for 2018.

Fed Policy Makers Divided Over Projected Interest Rate Hikes

Minutes for the FOMC meeting held December 12 and 13 reflected varied views among Committee members about three projected interest rate hikes in 2018. Analysts watch Fed policy decisions carefully as raising the target federal funds rate typically causes mortgage rates and consumer lending rates to rise.

Labor markets continued to grow and although mortgage lending standards eased somewhat, lenders remained reluctant to fund mortgages and auto loans for those with low credit scores. Inflation hovered beneath the Fed’s objective of two percent, but FOMC members voted to raise the target federal funds rate of 1.25 to 1.50 percent. This increase remained within the accommodative range according to FOMC members.

Mortgage Rates, New Jobless Claims

Average mortgage rates were lower across the board last week. Rates for 30-year fixed rate mortgages averaged 3.95 percent which was four basis points lower than the previous week. Rates for a 15-year fixed rate mortgage were six basis points lower at an average of 3.38 percent; rates for 5/1adjustable rate mortgages averaged 3.45 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose by 3000 claims to 250,000 new claims, which exceeded expectations of 240,000 new claims and prior week’s reading of 247,000 first-time jobless claims. December readings for the labor sector included ADP payrolls, which tracks private-sector jobs. 250,000 jobs were added in December as compared to November’s reading of 185,000 jobs added. The Commerce Department reported 148,000 new public and private sector jobs added in December against November’s reading of 252,000 jobs added. Analysts expected 195,000 new jobs to be added in December. National unemployment held steady at 4.10 percent, which matched expectations and November’s reading.

What’s Ahead For Mortgage Rates This Week – January 2, 2018

Last week’s economic readings included Case-Shiller Home Price Indices, pending home sales and consumer confidence. Weekly readings on mortgage rates and new jobless claims were also released.

CaseShiller: Home Prices Continue Growth

Case-Shiller Home Price Index reports indicated incremental growth in October with home prices growing month-to-month 0.70 percent for the S&P Case-Shiller 30-City Home Price Index. The 20-city index posted 6.20 percent gains year-over-year. Western cities continued to post the largest gains; Seattle, Washington led with a year-over-year growth of 12.70 percent. Las Vegas, NV and San Diego, California rounded out the top three with year-over-year home price growth of 10.20 percent and 8.10 percent.

Pending Home Sales Subject to Slim Inventory of Available Homes

Homes under purchase contract rose by 0.20 percent in November as compared to an increase in pending sales of 3.50 percent in October. Analysts expected pending sales to rise by 0.50 percent in November. Extremely low inventories of available homes continued to dampen home purchases in November. The National Association of Realtors® said there was a 3.40 months’ supply of homes for sale as compared to an average reading of a six months supply.

Small inventories of homes for sale constrict sales by driving up prices, increasing buyer competition and challenging buyers to find homes they want buy among limited choices.  Pending sales varied by region with the Northeast posting a 4.10 percent increase in pending sales; the Midwest posted an increase of 0.40 percent in pending sales The South posted a decline in pending sales of -0.40 percent. The West posted a decrease of 1.80 percent, which could indicate that rapidly rising prices in Western markets are topping out. Analysts said that the disparity between pending home sales and completed sales of pre-owned homes made it difficult to accurately assess the future housing market trends.

Mortgage Rates Rise, Consumer Confidence Highest in 17 Years

Freddie Mac reported higher average mortgage rates last week. Rates for a 30-year fixed rate mortgage averaged five basis points higher at 3.99 percent; the average rate for a 15-year fixed rate mortgage was six basis points higher at 3.44 percent. The average rate for 5/1 adjustable rate mortgages was eight basis points higher at 3.47 percent. Discount points were unchanged on average at 0.50 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Analysts had forecast a hike in mortgage rates after the Fed raised its target federal funds rate.

Consumer confidence rose to its highest rate in 17 years in November. December’s month-to-month index reading was 122.10 as compared to an expected reading of 127.5 and November’s reading of 128.6.  Although confidence dipped in December, analysts said that consumers are confident about jobs and the economy.

Whats Ahead

This week’s economic readings include releases on construction spending, ADP and Non-farm payrolls and the National unemployment rate. Weekly readings on mortgage rates and first-time jobless claims will also be released

What’s Ahead For Mortgage Rates This Week – December 26, 2017

Last week’s economic reports included readings on NAHB homebuilder confidence, housing starts, building permits issued and sales of previously-owned homes. Weekly releases on mortgage rates and new jobless claims were also released.

Builder Confidence Rises, Housing Starts Increase

According to the National Association of Home Builders Housing Market Index for December, builder confidence in housing market conditions rose by four points to 74. This reading was the highest since 1999. Builder confidence increased based on strong labor markets, demand for homes and potential tax breaks resulting from proposed tax code revisions.

Housing and real estate industries continued to cite an imbalance caused by high demand for homes and few available homes for sale. Increasing production of new single-family homes is the only way to ease the discrepancy between supply and demand. Reducing demand for homes would also slow the pace of home price growth, which impacted the ability of first-time and moderate-income home buyers to purchase homes.

Commerce Department readings indicate that builder confidence aligned with housing starts in November. 1.297 million housing starts were reported as compared to expectations of 1,250 housing starts based on October’s revised reading of 1.256 million starts on a seasonally adjusted annual basis. Housing starts were 3.30 percent higher month-to-month and 12.90 percent higher year-over-year. Single-family starts were 5.30 percent higher for November. Analysts said that this indicated builder confidence in single-family home building increased.

Building permits issued in November were lower than in October, but home construction slows in the winter months. 1,298 million building permits were issued in November as compared to 1.316 million permits issued in October.

Demand Pushes PreExisting Home Sales in November

Sales of Previously-owned Homes rose to 5.81 million sales on a seasonally-adjusted annual basis as compared to October’s reading of 5.50 million sales of previously-owned homes. Pre-owned homes sales were 5.60 percent month-to-month and 3.80 percent higher year-over-year.

The National Association of Realtors® reported increased sales of pre-owned homes in all regions except the West, where high home prices may be topping out. The Northeast reported 6.70 percent growth in sales; the Midwestern region had the highest rate of sales with growth of 8.40 percent and the South reported 8.30 percent growth in sales of previously-owned homes. The West reported a drop of -2.30 percent in sales of pre-owned homes.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. The rate for a 30-year fixed rate mortgage was one basis point higher at 3.94 percent; the rate for a 15-year fixed rate rose two basis points to 3.38 percent. The average rate for a 5/1 adjustable rate mortgage rose three basis points to 3.39 percent. Discount points for fixed rate mortgages averaged 0.50 percent for fixed rate loans and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were higher last week with 245,000 new claims filed as compared to last week; reading of 225,000 new jobless claims and expectations of 230,000 new claims.

Whats Ahead

This week’s economic releases include the Case-Shiller Home Price Index, pending home sales and consumer confidence. Mortgage rates and weekly jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – December 18, 2017

Last week’s economic reporting included readings on inflation, core inflation and the Post-meeting statement of the Fed’s Federal Open Market Committee. Fed Chair Janet Yellen also gave a press conference; weekly readings on mortgage rates and new jobless claims were also released.

Inflation Rises in November

U.S. inflation rose by 0.30 percent to 0.40 percent in November; October’s reading was 0.10 percent and November’s reading met analysts’ expectations. Core Consumer Price Index readings for November posted a gain of 0.10 percent, which fell short of the expected reading and October’s reading of 0.20 percent. Core CPI readings are less volatile as they do not include volatile food and energy sectors.

FOMC Statement: Fed Raises Target Rate

The post-meeting statement of the Federal Reserve’s Federal Open Market Committee cited strong economic signs in its decision to raise the target federal funds range by 0.25 percent to 1.25 percent to 1.50 percent. The Committee indicated that it expects inflation to hold steady in the near term and to stabilize closer to the Fed’s goal of two percent annually in the medium term.

Fed Chair Janet Yellen gave a press conference after the FOMC statement was released. She cited strong labor markets and low unemployment as signs of healthy economic conditions. The Fed’s dual mandate of achieving maximum employment and stable pricing has not been met due to lagging inflation. The Federal Reserve’s goal of 2 percent annual inflation fell short at 1.60 percent year-to-date. Job growth was strong with job growth expanding at a monthly average of 170,000 jobs over the past three months.

The Fed expects the inflation to achieve its 2 percent goal in 2019; unemployment is expected to remain at or near its current rate of 4.10 percent. This was good news as the expected exit of aging workers will increase in coming years as baby-boomers retire. Ms. Yellen affirmed her intention to aid in a smooth transition for the Federal Reserve as incoming Chair Jay Powell prepares to take over in February.

Mortgage Rates, Mixed, Weekly Jobless Claims

Fixed mortgage rates averaged one basis point lower last week with the rate for a 30-year fixed rate mortgage at 3.93 percent. The rate for a 15-year fixed rate mortgage averaged 3.36 percent’ the average rate for a 5/1 adjustable rate mortgages rose one basis point to 3.36 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Analysts said that lenders expected the Fed to raise rates and so factored in an increase of long term loan rates over time.

New Jobless claims dropped by 11,000 last week to 225,000. Analysts had expected 235,000 new claims based on the prior week’s reading of 236,000 new claims.