27
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 27, 2022

What's Ahead For Mortgage Rates This Week - June 27, 2022

Last week’s economic reporting included readings on home sales, Fed Chair Jerome Powell’s testimony on monetary policy to the House Financial Services Committee, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims were also released.

New Home Sales Pace Rises as Pre-Owned Homes Sales Pace Slows

The Commerce Department reported a seasonally-adjusted annual pace of 696,000 new homes sold in May; analysts predicted a year-over-year pace of 587,000 new homes sold as compared to April’s year-over-year pace of 629,000  new homes sold. While the year-over-year pace of new home sales increased by 10.70 percent month-to-month in May, the year-over-year sales pace for new homes fell by 5.90 percent.

Increasing materials and labor costs continued to challenge home builders, but high demand for homes fueled sales of new homes even as mortgage rates and home prices rose.  The median price of new homes sold in May fell to $449,000 from April’s record high of $454,700. The inventory of available homes fell by 7.20 percent in May, which equaled a 7.70-month supply of new homes for sale.

Regional results for new home sales were mixed; sales of new homes fell by -51.10 percent in the Northeast and were -18.30 percent lower in the Midwest. New home sales rose by 12.80 percent in the South and were 39.30 percent higher in the West.

In other news, Fed Chair Jerome Powell spoke on monetary policy before the House Financial Services Committee and explained the Fed’s strategy to ease inflation through a series of interest rate increases intended to cut into consumers’ purchasing power. 

Mortgage Rates Rise; New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by three basis points to 5.81 percent. Rates for 15-year fixed-rate mortgages averaged 4.92 percent and were 11 basis points higher than in the previous week. The average rate for 5/1 adjustable rate mortgages was eight basis points higher at 4.41 percent. Discount points averaged 0.80 percent for 30-ye

ar fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages.

Initial jobless claims fell to 229,000 new filings last week as compared to 231,000 new claims filed in the previous week. Analysts expected 225,000 new jobless claims last week. Continuing jobless claims inched up with 1.32 million continuing claims filed as compared to the previous week’s reading of 1.31 ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index fell to an index reading of 50.0 for June as compared to May’s reading of 50.2 and the expected June reading of 50.2. Consumer concerns over fuel prices and rising inflation eroded consumer confidence in the economy. Readings above 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reports include readings from Case-Shiller on home prices, pending home sales,  and construction spending. Weekly readings on mortgage rates and jobless claims will also be released.

21
Jun
By First Rate Financial Group
Financial Reports

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

What's Ahead For Mortgage Rates This Week - June 20, 2022Last week’s economic news included reporting on home builder confidence in national and regional housing markets, a post-meeting statement from the Federal Reserve’s Federal Open Market Committee, and Fed Chair Jerome Powell’s news conference. The National Association of Home Builders released its national and regional housing market indices. Weekly readings on mortgage rates and jobless claims were also published.

NAHB Housing Market Indices Reflect Slowing Growth in Housing Markets

June readings from the National Association of Home Builders showed slower growth in builder confidence in current and future U.S. housing markets. The NAHB reported the lowest reading in two years for June’s housing market indices as builder confidence fell for the sixth consecutive month. June’s index reading for the National Housing Market index fell two points to 67 and matched analysts’ forecasts. Readings over 50 indicate a majority of home builders are positive about housing market conditions.

NAHB chair Jerry Konter said, “Six consecutive monthly declines in home builder confidence is a clear sign of a slowing housing market in a high inflation, slow growth economic environment.” Mr. Konter also noted the impact of rising mortgage rates on entry-level and moderate-income home buyers: “Entry-level markets were particularly affected by declines in housing affordability…builders are adopting a more cautious stance as demand softens with higher mortgage rates.” Rising mortgage rates added to builders’ ongoing concerns with high materials costs and shortages of skilled workers.

NAHB’s regional homebuilder indices also declined with homebuilder sentiment in the West falling by nine points; the Midwestern regional index dropped by six points. Home builder sentiment decreased by two points in the South and by one point in the Northeast.

On Wednesday, the Federal Open Market Committee of the Federal Reserve announced that it would raise its benchmark interest rate range by 0.75 percent in its attempts to slow inflation. The Federal Reserve has a dual mandate of maintaining inflation at or near two percent and achieving maximum employment. The Fed is expected to raise its key rate range into 2024 in its efforts to ease inflation.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported a jump in average mortgage rates last week after the Fed announced its decision to raise its benchmark interest rate range to 0.75 to 1.00 percent. This was the highest federal funds range increase since 1981. The average rate for 30-year fixed-rate mortgages rose by 55 basis points to 5.78 percent; the average rate for 15-year fixed-rate mortgages rose by 43 basis points to 4.81 percent. The average rate for 5/1 adjustable rate mortgages rose by 21 basis points to 4.33 percent. Discount points averaged 0.90 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 229,000 first-time claims filed last week as compared to the prior week’s reading of 232,000 first-time claims filed and the expected reading of 220,000 new jobless claims filed. Last week’s reading for continuing jobless claims was unchanged with 1.31 million ongoing claims filed.

What’s Ahead

This week’s scheduled economic news includes readings on sales of previously owned homes and testimony by Fed chair Jerome Powell to the Senate Banking Committee and the House Financial Services Committee. The University of Michigan will release its monthly index reading on consumer sentiment and weekly readings on mortgage rates and jobless claims will also be released. 

13
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 13, 2022

What's Ahead For Mortgage Rates This Week - June 13, 2022

Last week’s economic reporting was highly focused on inflation, which grew at its fastest pace since 1981. Rising fuel and food prices boosted inflation in the U.S. and abroad; Analysts said the Ukraine War and supply chain problems continued to drive inflation. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Hits Highest Level in 41 Years

The government’s Consumer Price Index, which tracks inflation, rose at a month-to-month pace of 1.0 percent in May compared to the expected reading of 0.70 percent and April’s reading of 0.30 percent growth. May’s Core Consumer Price Index, which excludes food and fuel sectors, rose by 0.60 percent month-to-month.

Year-over-year readings for inflation also increased in May as inflation rose by 8.60 percent compared to an expected reading of 

8.30 percent growth that matched April’s reading for year-over-year inflation. The year-over-year core Consumer Price Index rose by 6.0 percent in May compared to expectations of 5.90 percent and April’s year-over-year reading of 6.20 percent growth in consumer prices. Consumers felt the most pain paying higher rents and dealing with rising food and fuel prices. These categories represent a significant portion of household expenses and there was no immediate relief in sight. The Federal Reserve plans to raise its key interest rate range every month as it attempts to slow rapid inflation.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose by 14 basis points to 5.23 percent; rates for 15-year fixed-rate mortgages averaged six basis points higher at 4.38 percent. Rates for 5/1 adjustable rate mortgages loans were eight basis points higher at 4.12 percent. Discount points for 30-year fixed-rate mortgages averaged 0.90 percent and 0.80 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent. Ongoing shortages of available homes and rising materials costs continued boosting home prices and eroding affordability for first-time and moderate-income home buyers.

Initial jobless claims increased last week with 229,000 first-time claims filed compared to the prior week’s reading of 202,000 initial claims filed. Continuing jobless claims were unchanged last week with 1.31 million ongoing claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on housing markets, building permits issued, and housing starts. The Federal Reserve’s Federal Open Market Committee will release its post-meeting statement and Federal Reserve Chair Jerome Powell will give a post-meeting press conference. Weekly readings on mortgage rates and jobless claims will also be released.