07
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 7, 2022

Last week’s economic reporting included the Federal Reserve’s statement on its target interest rate range and Fed Chair Jerome Powell’s regularly-scheduled press conference. Data on construction spending and public and private-sector jobs was published along with weekly reports on mortgage rates and jobless claims.Last week’s economic reporting included the Federal Reserve’s statement on its target interest rate range and Fed Chair Jerome Powell’s regularly-scheduled press conference. Data on construction spending and public and private-sector jobs was published along with weekly reports on mortgage rates and jobless claims.

Fed Hikes Key Interest Rate Range, but Signals a Future Slowdown

The Federal Reserve increased its key interest rate range last week from 3.50-3.75 percent to 3.75-4.00 percent. While this was the highest interest rate range in 15 years, the Fed said it plans to continue raising the target interest rate range until it reduces the inflation rate to 2 percent “over time.” Analysts viewed the Fed’s latest comments as less aggressive than its stance earlier this year.

Fed chair Jerome Powell said during his scheduled press conference that at some time “it will be appropriate to slow the pace of increases.” Mr. Powell also cautioned that the target interest rate range will likely rise past the current expected rate range of 4.50 to 4.75 percent.

Mortgage Rates Fall, Jobless Claims Mixed

Average mortgage rates fell last week as the rate for 30-year fixed-rate mortgages fell by 13 basis points to 6.95 percent. Rates for 15-year fixed-rate mortgages averaged 6.29 percent and 7 basis points lower than in the previous week. Rates for 5/1 adjustable rate mortgages averaged one basis point lower at 5.95 percent; Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 1.20 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.20 percent.

 

Initial jobless claims fell by 217,000 claims as compared to the previous week’s reading of 218,000 new claims filed. Continuing jobless claims increased to 1.49 million claims filed from the previous week’s reading of 1.44 million ongoing claims filed.

Job Growth Data Mixed, Unemployment Rate Rises

ADP reported 239,000 private-sector jobs added in October as compared to expectations of 195,000 jobs added and September’s reading of 192,000 private-sector jobs added. The Commerce Department’s Non-Farm Payrolls reported 261,000 public and private-sector jobs added in October as compared to expectations of 205,000 jobs added and 315,000 jobs added in September. The national unemployment rate rose to 3.7 percent in October from September’s rate of 3.5 percent.

In other news, construction spending rose 0.2 percent in September; analysts expected spending to drop -0.6 percent based on August’s construction spending pace of -0.7 percent

What’s Ahead

 

This week’s scheduled economic reporting includes readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.

Last week’s economic reporting included the Federal Reserve’s statement on its target interest rate range and Fed Chair Jerome Powell’s regularly-scheduled press conference. Data on construction spending and public and private-sector jobs was published along with weekly reports on mortgage rates and jobless claims.
Fed Hikes Key Interest Rate Range, but Signals a Future Slowdown
The Federal Reserve increased its key interest rate range last week from 3.50-3.75 percent to 3.75-4.00 percent. While this was the highest interest rate range in 15 years, the Fed said it plans to continue raising the target interest rate range until it reduces the inflation rate to 2 percent “over time.” Analysts viewed the Fed’s latest comments as less aggressive than its stance earlier this year. 
Fed chair Jerome Powell said during his scheduled press conference that at some time “it will be appropriate to slow the pace of increases.” Mr. Powell also cautioned that the target interest rate range will likely rise past the current expected rate range of 4.50 to 4.75 percent. 
Mortgage Rates Fall, Jobless Claims Mixed
Average mortgage rates fell last week as the rate for 30-year fixed-rate mortgages fell by 13 basis points to 6.95 percent. Rates for 15-year fixed-rate mortgages averaged 6.29 percent and 7 basis points lower than in the previous week. Rates for 5/1 adjustable rate mortgages averaged one basis point lower at 5.95 percent; Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 1.20 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.20 percent.
Initial jobless claims fell by 217,000 claims as compared to the previous week’s reading of 218,000 new claims filed. Continuing jobless claims increased to 1.49 million claims filed from the previous week’s reading of 1.44 million ongoing claims filed.
Job Growth Data Mixed, Unemployment Rate Rises
ADP reported 239,000 private-sector jobs added in October as compared to expectations of 195,000 jobs added and September’s reading of 192,000 private-sector jobs added. The Commerce Department’s Non-Farm Payrolls reported 261,000 public and private-sector jobs added in October as compared to expectations of 205,000 jobs added and 315,000 jobs added in September. The national unemployment rate rose to 3.7 percent in October from September’s rate of 3.5 percent. 
In other news, construction spending rose 0.2 percent in September; analysts expected spending to drop -0.6 percent based on August’s construction spending pace of -0.7 percent
What’s Ahead
This week’s scheduled economic reporting includes readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.

31
Oct
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – October 31, 2022

What's Ahead For Mortgage Rates This Week - October 31, 2022

Last week’s economic news included readings on home prices from S&P Case-Shiller home price indices along with sales of new homes and federal government data on inflation. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller Home Price Indices: Home Price Growth Slows in August

U.S home prices fell by 9.8 percent year-over-year in August according to S&P Case-Shiller’s National Home Price Index. National home prices fell by -5.3 percent in July. The 20-City Home Price Index rose  13.1 percent year-over-year but reflected readings from markets that were stronger in 2021. Miami. Florida, Tampa, Florida, and Charlotte, North Carolina held the top three spots for home price gains.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported that home prices for homes owned or financed by the two government-sponsored mortgage organizations fell by -7.6 percent in August as compared to July’s reading of -7.3 percent.

The Commerce Department reported that new home sales fell by -10.9 percent to a seasonally-adjusted annual pace of 603,000 sales from August’s revised reading of 677,000 sales. High home prices and rising mortgage rates sidelined prospective buyers concerned about affordability and mortgage qualification requirements. Homebuilders have repeatedly cited rising materials costs and rising mortgage rates as reasons for scaling back new home construction. The good news is that September’s reading surpassed analysts’ expected reading of 593,000 new home sales. Sales of previously owned homes fell to 4.71 million sales on a seasonally-adjusted annual basis as compared to the expected reading of 4.70 million sales and 4.78 million sales of previously-owned homes in August.

Mortgage Rates Top 7 Percent as New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose 14 basis points to 7.08 percent. Rates for 15-year fixed-rate mortgages averaged 6.36 percent and were 13 basis points higher. Rates for 5/1 adjustable rate mortgages averaged 5.96 percent and rose 25 basis points. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 1.40 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell to 214,000 initial claims filed as compared to the previous week’s reading of 226,000 first-time claims filed and the expected reading of 230,000 first-time claims filed.

What’s Ahead

This week’s scheduled economic news includes readings on construction spending, sales of previously-owned homes, and a statement from the Federal Reserve’s Federal Open Market Committee. Fed Chair Jerome Powell is also scheduled to give a post-meeting press conference.

28
Oct
By First Rate Financial Group
Financial Reports

S&P Case-Shiller Home Price Indices: U.S. Home Price Growth Slows in August

S&P Case-Shiller Home Price Indices: U.S. Home Price Growth Slows in AugustU.S home price growth slowed for the second consecutive month in August according to S&P Case-Shiller’s national home price index. National home price growth fell by -9.8 percent year-over-year as compared to July’s year-over-year reading of  -5.3 percent. Home price growth slowed by -1.1 percent month-to-month from July to August.

Rising Mortgage Rates and Recession Worries Dampen Homebuyer Interest

The Mortgage Bankers Association forecasted a recession in 2023 and expects mortgage rates to fall to approximately 5.40 percent by the end of 2023. Mike Fratantini, senior vice president and chief economist at the MBA, said: “The upside of [a potential recession] for the industry is that it’s likely going to bring rates down a little bit.” Current rates for 30-year fixed-rate mortgages are near seven percent; the MBA expects 30-year fixed mortgage rates to fall to approximately 5.40 percent by the end of 2023.

Rising mortgage rates coupled with high home prices created affordability concerns and challenged would-be buyers in meeting mortgage approval requirements. Less demand for homes caused home price growth to slow nationwide.

S&P Case-Shiller 20-City Home Price Index: August Home Price Growth Slows in All Cities

Home price growth peaked in April with a  national home price growth rate of 21.2 percent year-over-year, but slowed to a pace of 16.0 percent in July and 13.1 percent in August. The top three cities in the 20-City Index were Miami, Florida with 28.6 percent home price growth. Home prices rose by 28.0 percent in Tampa, Florida, and were 21.3 percent higher in Charlotte, North Carolina.

In related news, the Federal Housing Finance Agency released its House Price Index for August. Home prices for homes owned or financed by Fannie Mae and Freddie Mac fell by -0.7 percent in August. This was the first time since March 2011 that the FHFA HPI decreased for two consecutive months.

Inventories of newly-built homes were higher than normal at a 9.2 months supply. Real estate pros typically consider a  six- months supply of homes for sale reflective of a balanced housing market.  Rising materials costs caused home builders to raise home prices; the median home price of a new home in August was $470,600 and 13.90 percent higher year-over-year, but some builders are reducing prices and offering buyer incentives on new homes as sales falter.