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What’s Ahead For Mortgage Rates This Week – December 11, 2017

December 11, 2017 Comments off

Last week’s economic reports included readings on projected top housing markets for 2018, weekly readings on mortgage rates and new jobless claims. Labor sector readings on private-sector job growth, private and public-sector job growth and the national unemployment rate were released. Projected top housing markets in 2018 were also released.

Realtors Release Projections for Top Housing Markets in 2018

Prospective homebuyers and retirees facing home affordability issues in metro areas such as New York City and the West Coast are seeking affordable housing markets according to data released by the National Association of Realtors®.

The top three housing markets for 2018 are expected to be Las Vegas, Nevada with a median home price of $285.405 and expected annual price growth of 6.90 percent. Dallas Texas held second place with a median home price of $339,000 and expected annual home price growth of 5.60 percent. Deltona, Florida held the third position for top housing markets in 2018. Deltona is located between Daytona Beach and Orlando, Florida. Within the city of Deltona, home prices average $159,000 in Deltona and $275.000in the metro area. Home prices are expected to grow at an annual rate of 6.0 percent.

Home prices continue to be driven by low supplies of homes for sale. High demand is causing prices in many metro areas to rise to unaffordable levels/ Retirees who are no longer tied to pricey metro areas are moving to less costly neighborhoods.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher mortgage rates across the board. The average rate for a 30-year fixed rate mortgage rose 0.04 basis points to 3.94 percent. 15-year fixed mortgage rates averaged 0.06 basis points higher at 3.36 percent. The average rate for a 5/1 adjustable rate mortgage was 0.03 basis points higher for an average rate of 3.35 percent. Discount points average 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week, with 236,000 new claims filed against expectations of 240,000 new claims filed and the prior week’s reading of 238,000 new jobless claims filed. According to November’s federal Non-Farm Payrolls report, government and private sector payrolls grew by 228,000 jobs as compared to expectations of 200,000 new public and private sector jobs added and the prior month’s reading of 244,000 jobs added.

ADP reported 190,000 private-sector jobs added in November as compared to 235,000 new jobs added in October. The national unemployment rate held at 4.10 percent, which was the lowest level in almost 17 years.

Whats Ahead

This week’s economic readings include releases on inflation, the Fed’s FOMC post-meeting statement, Fed Chair Janet Yellen’s press conference along with weekly readings on mortgage rates and new jobless claims. 

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What’s Ahead For Mortgage Rates This Week – December 4, 2017

December 4, 2017 Comments off

Last week’s economic releases included readings on new and pending home sales, Case-Shiller index readings for September, and construction spending. Weekly readings on new jobless claims and mortgage rates were also released.

Home Price Growth Driven by Shortage of Homes for Sale

Case-Shiller Home Price Indices reported 6.20 percent growth in home prices year-over-year in September as compared to August’s reading of 6.00 percent year-over-year growth for August. September’s reading was the highest for national home price growth since 2014.

According to the 20-City Home Price Index, Seattle, Washington held on to first position with 12.90 percent home price growth year-over-year. Analysts noticed that the month-to-month reading for Seattle home prices dipped by 0.30 percent, which could indicate that home price growth may be cooling. Las Vegas, Nevada achieved second position for home price growth with a year-over-year reading of 9.00 percent. San Diego, California held third position with year-over-year home price growth of 8.20 percent.

High demand for homes coupled with the low inventory of homes for sale continued to drive home prices up in 16 of 20 cities charted in Case-Shiller’s 20-City Home Price Index.

New and Pending Home Sales Rise in October

Sales of new homes rose to 685,000 on a seasonally-adjusted annual basis to their highest reading in 10 years. The reading for new home sales year to date rose by 8.90 percent as compared to the same period in 2016. Analysts expected a reading of 620,000 new home sales as compared to September’s revised reading of 645,000 new homes sold. As of October, there was a 4.90 months supply of new homes for sale, as compared to September’s 5.20 months supply of new homes on the market.

The Commerce Department reported 3.50 percent growth in pending home sales in October as compared to September’s negative reading of -0.40 percent. In a further sign of confidence in housing markets, construction spending rose by 1.40 percent in October as compared to September’s reading of 0.30 percent and analysts” expectation of an increase of 0.40 percent in construction spending.

Mortgage Rates Mixed, New Jobless Claims

Mortgage rates were mixed last week with average rates for fixed rate mortgages dropping two basis points. A 30-year fixed rate mortgage averaged 3.90 percent; rate; rates for a 15-year fixed rate mortgage averaged 3.30 percent and rates for a 5/1 adjustable rate mortgage rose two basis points to 3.32 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 dipped by 2000 new claims to 238,000 initial claims filed. Analysts expected new jobless claims to hold steady at the prior week’s reading of 240,000 new claims filed.

Whats Ahead

This week’s scheduled economic releases include ADP payrolls, and Commerce Department readings on Farm Payrolls and the national unemployment rate. Consumer sentiment will be updated next week along with weekly readings on mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – November 27, 2017

November 27, 2017 Comments off

Last week’s economic reports included readings on pre-owned home sales, weekly reports on mortgage rates and new jobless claims and consumer sentiment. The weekly news cycle was shorter due to the Thanksgiving holidays on Thursday and Friday.

Sales of PreviouslyOwned Homes Jump in October

Sales of previously owned homes grew by 1.20 percent in October as compared to September’s reading of 0.10 percent growth month-to-month and indicated a seasonally adjusted annual rate of 5.48 million sales. October home sales increased as inventories of available homes declined. There was a 3.90 months supply of homes in October as compared to a 4.40 months supply of available homes in September. Real estate pros typically consider a six-month supply of homes a healthy balance between homes available and potential home buyers.

Analysts said that October’s inventory of homes for sale was the second lowest on record from 1999 to present. The National Association of Realtors®, which produces the Existing Home Sales report, said that sales to date were 4.60 percent higher year-to-date.

All regions tracked by the National Association of Realtors® reported increased sales of previously owned homes. The Northeast posted a 4.20 percent gain; the Midwest posted a gain of 0.80 percent and the South posted a gain of 1.90 percent. The West posted the highest gain in pre-owned home sales with 2.40 percent growth rate.

Analysts expect sales of pre-owned homes to rise by 3.70 percent in 2018; proposed revisions to tax laws could sideline home buyers if homeownership is “dis-incentivized” by tax reforms.

Mortgage Rates Mixed, New Jobless Claims Lower

Freddie Mac reported mixed results for average mortgage rates. The rate for 30-year fixed rate mortgages fell three basis points to 3.92 percent. Average rates for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages each rose by one basis point to 3.32 percent and 3.22 percent respectively. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

New jobless claims were lower last week with 239,000 new claims filed. Analysts expected 240.000 new claims as compared to the prior week’s reading of 252,000 new claims.

The University of Michigan’s Consumer Sentiment Index fell from an index reading of 100.7 in October to 98.5 in November.  This was the second highest reading in thirteen years. Consumer sentiment remains high despite headwinds including potential tax reform.

Whats Ahead

This week’s scheduled economic readings include reports on new and pending home sales, Case-Shiller Home Price Indices and inflation will be released. Weekly readings on mortgage rates and new jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – November 20, 2017

November 20, 2017 Comments off

Last week’s economic news included remarks by Fed Chair Janet Yellen about the diversity of opinions in the Federal Open Market Committee, readings on inflation, and the National Association of Home Builders Housing Market Index. The Commerce Department issued reports on housing starts and building permits issued; Freddie Mac and the Commerce Department issued weekly readings on mortgage rates and new jobless claims.

Fed Chair Discusses Pros and Cons of Diverse Opinions Among Policymakers

During a panel presentation of global economic leaders, outgoing Fed Chair Janet Yellen discussed the pros and cons of having 19 members on the Federal Reserve’s Federal Open Market Committee, which is responsible for the Fed’s policymaking decisions.

Chair Yellen said that it was “challenging” in terms of expressing diverse member opinions into a pat statement of Fed policy. She noted that multiple opinions on any aspect of the Fed’s decisions could be confusing for the public. She also said that individual and varied opinions were essential in considering all aspects of the Fed’s policy decisions: “The most important strength is that we avoid ‘group-think,’ which is a real pitfall for policy committees.”

NAHB: Home Builder Confidence Hits EightMonth High

The National Association of Home Builders reported its highest housing market index reading in eight months. The monthly survey of home builders consists of readings on builder confidence in present housing market conditions, market conditions within the next six months and the volume of buyer traffic in new housing developments. Any reading over 50 indicates that more builders are confident about housing market conditions.

November’s reading of 70 was two points higher than in October; analysts expected a one-point decline to 67. Concerns over tax reforms potentially impacting homeowner tax deductions for mortgage interest were expected to impact builder confidence, but NAHB did not mention tax reform in their summation of builder confidence readings for November.

Component readings used to comprise the HMI reading were mixed. Builder sentiment increased two points to 77 for current housing market conditions. Builder confidence in market conditions over the next six months dipped by one point to 77 and builder confidence in buyer traffic in new home developments rose two points to an index reading of 50.

Builders have repeatedly cited concerns about shortages of lots and labor as well as increasing costs for building materials. NAHB said in a statement that November’s Housing Market Index reading was a “strong indicator that the housing market continues to grow steadily.”

According to the Commerce Department, October housing starts rose to 1.29 million on a seasonally-adjusted annual basis; analysts expected 1.20 million starts based on September’s reading of 1.14 million starts. 5.30 percent of housing starts were single-family construction.

Builders also took out more building permits in October; 1.30 million permits were issued against 1.23 million permits issued in September. The increased volume of building permits was partially attributed to reconstruction after hurricanes in Florida and Texas, but in the Northeast, building permits rose by 42 percent. The Northeast region is the smallest reported, but warm weather was cited as boosting permits issued.

Builder sentiment has been strong all year and was propelled by healthy job markets and lower mortgage rates.

Mortgage Rates, New Jobless Claims Rise

Fixed mortgage rates rose last week with the average rate for an average 30-year fixed rate of 3.95 percent; the average 15-year mortgage rate rose seven basis points to an average of 3.31 percent. The average rate for a 5/1 adjustable rate mortgage dipped one basis point to 3.21 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 to 249,000 last week as compared to estimates of 235,000 new claims and the prior week’s reading of 239,000 new jobless claims. Jobs lost and a backlog of first-time claims due to recent hurricanes were cited as the primary cause for the rise in new jobless claims.

Whats Ahead

This week’s scheduled economic news includes readings on previously-owned home sales, minutes from the Fed’s last Federal Open Market Committee meeting. Weekly readings on mortgage rates and new jobless claims are also scheduled.

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What’s Ahead For Mortgage Rates This Week – November 13, 2017

November 13, 2017 Comments off

Last week’s economic news included a survey of senior loan officers, Freddie Mac’s average mortgage rates, and new jobless claims. An index reading for consumer sentiment was also reported.

Loan Officers: Standards for Residential Real Estate Loans Eased or Unchanged

According to the Federal Reserve’s Survey of Senior Loan Officers,72 institutions surveyed reported that all types of residential real estate loans saw easing of lending standards or no change in lending requirements. Demand for real estate loans eased, which likely influenced financial institutions decision not to tighten lending criteria for home loans. In contrast, banks surveyed indicated tighter lending requirements for auto loans and credit cards.

Mortgage Rates Fall, New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week.30-year fixed rates averaged 3.90 percent; 15-year fixed rates averaged 3.24 percent and the average rate for a 5/1 adjustable rate mortgage rates averaged 3.22 percent. Discount points averaged 0.40 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate and 5/1 adjustable rate mortgages. Lower mortgage rates were good news for home buyers who continue to face high home prices coupled with competition by cash buyers.

First-time jobless claims increased by 10,000 new claims to 239,000 new claims. Analysts expected a reading of 231,000 new claims based on the prior week. The week-to-week reading, which can be volatile, was eclipsed by the four-week rolling average of new claims, which hit its lowest reading since March 1973.

The bump in weekly first-time jobless claims was caused by a backlog in jobless claims filed in Puerto Rico. In the aftermath of Hurricane Maria, Computer and infrastructure problems caused delays in claim filing.

Consumer sentiment dipped in November to an index reading of 97.8 as compared to an expected reading of 100.7 and October’s reading, also 100.7; Indicators of rising inflation concerned consumers, according to the University of Michigan, which conducts the survey.

Whats Ahead

This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, housing starts, building permits issued and weekly reports on mortgage rates and new jobless claims. Monthly readings on inflation and retail sales will also be released.

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What’s Ahead For Mortgage Rates This Week – November 6, 2017

November 6, 2017 Comments off

Last week’s economic news included readings on Case-Shiller home prices, construction spending, and consumer sentiment. Labor sector readings on private and public employment and the national unemployment rate were also released. Weekly readings on mortgage rates and new jobless claims were also released.

CaseShiller: Home Price Growth Approaches Record

Home price growth approached a record set in 2006 in August, but analysts said that affordability and the shortage of homes for sale could signal slower growth ahead. David M. Blitzer, Chairman of the S&P Index Committee, said that while home prices appeared to be “unstoppable,” signs of slowing momentum could signal the end of rapid home price growth.

Case-Shiller’s national home price index reported a seasonally-adjusted annual growth rate of 6.10 percent as compared to July’s corresponding reading of 5.90 percent. The 20-City Index reading was 1.80 percent short of the record set in 2006. Seattle, Washington led home price growth with a reading of 13.20 percent year-over-year. Las Vegas, Nevada held second place with a seasonally-adjusted annual growth rate of 8.60 percent and San Diego, California held third place in the 20-City Index with a reading of 7.80 percent.

While the West continued to post highest home price gains, some home price gains are leveling out. San Francisco, California, which posted double digit home price growth in recent years, posted 6.10 percent growth year-over-year and a negative reading of -0.10 percent in August as compared to July.

September construction spending rose due to public works projects and housing construction. This was good news as a shortage of available homes has daunted real estate sales in past months. Building more homes is the only solution to the ongoing shortage of homes for sale. Construction spending 4ose0.30 percent in September as compared to an expected reading of no change, which was based on August’s reading of 0.10 percent.

Mortgage Rates Little Changed, New Jobless Claims Fall

Freddie Mac reported no change in the average rate of 3.94 percent. Average rates for a 15-year mortgage and a 5/1 adjustable rate mortgage were each two basis points higher at 3.27 percent and 3.23 percent respectively. Average discount points were 0.50 percent for all three mortgage types. The President is expected to announce the appointment of a new Federal Reserve Chair this week, which could impact interest rates either way.

First-time jobless claims were lower last week with 229,000 claims filed as compared to expectations of 235,000 new claims filed and the prior week’s reading of 234,000 new jobless claims. Private-sector employment grew by 235,000 jobs in October as compared to September’s reading of 110,000 new private-sector jobs.

The Commerce Department reported 261,000 new public and private-sector jobs in October. Analysts expected 325,000 new jobs, but September’s reading was adjusted to 18,000 new public and private sector jobs added. The national unemployment rate dipped to 4.10 percent as compared to an expected reading of 4.10 percent and September’s reading of 4.20 percent.

Consumer confidence grew to an index reading of 125.9 in October as compared to analysts’ expected reading of 121.3 and the prior month’s reading of 119.5.

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What’s Ahead For Mortgage Rates This Week – October 30, 2017

October 30, 2017 Comments off

Last week’s economic news included readings on new and pending home sales and weekly reports on mortgage rates and new jobless claims.

New Home Sales Exceed Expectations; No Growth for Pending Sales

September sales of new homes reached a 10-year high with a seasonally-adjusted annual rate of 667,000 new homes sold. Analysts said that high demand drove September sales past the expected rate of 555,000 sales and August’s reading of 561,000 sales of new homes. September’s reading was 19.9 percent higher than for August and was 17 percent higher year-over-year. September’s reading was 8.60 percent higher for year-to-date sales of new homes. This news may encourage builders to ramp up new home construction, but the widespread damage caused by hurricanes and fires will account for rebuilding thousands of previously-owned homes in the coming months.

The national average price for a new home was $319,700 as compared to $314,700 year-over-year. Real estate professionals said that it would take five months to sell all new homes currently available.

Pending home sales did not change from August to September. The Commerce Department reported no change from August’s reading of – 2.80 percent. Low inventories of pre-owned homes and affordability concerns may have sidelined would-be buyers as competition for available homes and home prices rose.

Regional results for pending sales were mixed. The Northeast region reported 1.20 percent growth in pending home sales, while the Midwest reported 1.40 percent growth and the West topped regional pending sales rates with 1.90 percent growth. The Southern region posted -2.30 percent fewer pending sales; hurricanes likely accounted for fewer contracts signed in September. Year-over-year pending home sales were lower in all regions.

Weekly Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose across the board last week. Freddie Mac reported that averaged rates for a fixed rate mortgage rose by six basis points for 30-year and 15-year mortgages. The average rate for a 30-year fixed rate mortgage was 3.94 percent; the average rate for a 15-year fixed rate mortgage was 3.25 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 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 to 233,000 claims, which matched expectations and exceed the prior week’s reading of 223,000 first time claims, which was a 44-year low. The jump in first-time claims is not due to layoffs as employers report shortages of skilled candidates to fill job openings.

Whats Ahead

This week’s scheduled economic news includes readings on Case-Shiller home prices, construction spending and labor sector readings on private and public-sector employment. The national unemployment rate will be released along with weekly readings on mortgage rates and new jobless claims.

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