21
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 21, 2022

What's Ahead For Mortgage Rates This Week - November 21, 2022Last week’s economic reporting included readings on U.S housing markets, housing starts, and building permits issued. Data on sales of previously-owned homes were released along with weekly reports on mortgage rates and jobless claims.

Builder Sentiment on Housing Markets Declines in November

November’s National Association of Home Builders Housing Market Index fell five points to an index reading of 33; analysts expected a reading of 36. November’s reading was the lowest since June 2012 except during the pandemic.

All three indices contributing to the Housing Market Index were lower in November than in October. Homebuilder sentiment regarding current sales conditions fell six points to an index reading of 39; by comparison, this reading was 83 in November 2021. Builder confidence in home sales conditions over the next six months fell four points to 31. Homebuilder confidence in prospective buyer traffic in new single-family developments fell five points to an index reading of 20.

Homebuilders were less confident about housing market conditions in the four regions tracked by the NAHB. Builder sentiment in the Northeast fell six points to an index reading of 41. Builder sentiment in the Midwest fell two points to 38. Builder confidence in the South fell seven points to 42. Builder sentiment was five points lower in the West at 29. Index readings of less than 50 indicate that most builders lack confidence in housing market conditions.

Builders continue to experience rising materials costs and regulatory expenses associated with developing land and home construction. Rising home prices and resulting affordability concerns compelled builders to ask lawmakers to reduce regulatory costs connected with developing land and building homes.

Mortgage Rates, Jobless Claims

Freddie Mac changed the format of its Primary Mortgage Market Survey to include only average rates for 30 and 15-year fixed-rate mortgages and the survey no longer reports average discount points. The average rate for 30-year mortgages fell 47 basis points to 6.61 percent. Rates for 15-year mortgages averaged 5.98 percent and four basis points lower than in the previous week. 222,000 initial jobless claims were filed last week. Analysts expected 225,000 new claims filed as compared to the previous week’s reading of 226,000 first-time claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on new home sales, minutes of the most recent meeting of the Fed’s Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims. Financial markets will be closed on Thursday and Friday for the Thanksgiving holiday. 

17
Nov
By First Rate Financial Group
Financial Reports

NAHB: Home Builders Concerned Over Housing Market Conditions

NAHB: Home Builders Concerned Over Housing Market ConditionsThe National Association of Home Builders’ Housing Market Index for November showed builders’ growing concerns over U.S. housing market conditions. November’s index reading dropped five points to 33 as compared to October’s reading of 38 and the November 2021 reading of 83. November’s home builder index reading was the lowest reading since June 2012 except during the pandemic. Readings over 50 indicate that most home builders were positive about housing market conditions.

All three index readings that contribute to the HMI reading were also lower. Builder confidence in current housing market conditions fell six points to an index reading of 39. Home builder sentiment over housing markets in the next six months fell four points to an index reading of 31. Home builder expectations for prospective buyer traffic in new housing developments fell five points to November’s reading of 20.

Home Builders Face Multiple Challenges

Home builders continued to face obstacles including rising materials costs and falling demand for homes. Rising mortgage rates and home prices sidelined potential buyers. The Federal Reserve’s decision to raise its target interest rate range to slow inflation caused mortgage rates to rise; home builders asked lawmakers to lower costs related to land development and home construction to offset the impact of rising mortgage rates.

NAHB chairman Jerry Konter said: “Higher interest rates have significantly weakened demand for new homes as buyer traffic is becoming increasingly scarce. With the housing sector in a recession, the administration and new Congress must turn their focus to policies that lower the cost of building and allow the nation’s home builders to  expand housing production.”

Builders reported offering buyer incentives including mortgage rate buydowns, paying discount points for buyers, and reducing home prices. 37 percent of home builders cut prices in November as compared to 26 percent in September. Price reductions averaged 6 percent. Current home price reductions were lower than reductions of 10 to 12 percent seen during the Great Recession in 2008.

NAHB Chief Economist Robert Dietz said, “To ease the worsening housing affordability crisis, policymakers must seek solutions that create more affordable and attainable housing.” Regional readings for home builder confidence were also lower. Builder sentiment in the Midwest fell 2 points to 38; Builder sentiment in the Northeast fell 6  points to 41, and builder sentiment in the South fell 7  points to 42. Home builder sentiment in the West fell 5 points to an index reading of 29.

14
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 14, 2022

What's Ahead For Mortgage Rates This Week - November 14, 2022Last week’s scheduled economic news included readings on monthly and year-over-year inflation and the University of Michigan’s preliminary reading on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Consumer Price Index: Inflation Shows Signs of Slowing

Government readings on October inflation showed signs of stabilizing and even slowing. The Consumer Price Index for October showed month-to-month inflationary growth of 0.40 percent as compared to the expected reading of 0.60 percent and September’s reading of 0.40 percent growth. Year-over-year inflation rose by 7.70 percent as compared to the expected reading of 7.90 percent and September’s reading of 8.20 percent.

Month-to-month core inflation, which excludes volatile food and fuel sectors, rose 0.30 percent in October as compared to expectations of 0.50 percent growth and September’s reading of 0.60 percent growth. Year-over-year core inflation rose 6.30  percent; analysts expected year-over-year core inflationary growth of 6.50 percent. September’s year-over-year reading for core inflation was 6.60 percent. The Federal Reserve considers year-over-year inflation of two percent as normal.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week as rates for 30-year fixed-rate mortgages averaged 7.08 percent and 13 basis points higher than for the previous week. Rates for 15-year fixed-rate mortgages rose nine basis points and averaged 6.38 percent. Rates for 5/1 adjustable rate mortgages averaged 6.06 percent and 11 basis points higher than for the previous week. Discount points averaged 0.90 percent for 30-year fixed-rate mortgages and 1.00  percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.20 percent

Initial jobless claims rose last week with 225,000 new claims filed as compared to 220,000 new claims expected and  218,000 first-time jobless claims filed. in the previous week. 1.49 million continuing jobless claims were reported, which matched the previous week’s reading.

The University of Michigan released its preliminary consumer sentiment survey for November with an index reading of 54.7. Analysts expected a reading of 59.5 for November; October’s reading was 59.9. Index readings over 50 indicate that most survey participants view current economic conditions as positive.

What’s Ahead

This week’s scheduled economic reporting includes readings on housing markets, sales of previously-owned homes, government reports on housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims will also be released.