02
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 2, 2022

Last week’s economic reporting included readings from S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency House Price Index, and the Commerce Department on sales of new homes. Weekly readings on mortgage rates and jobless claims were also reported. S&P Case-Shiller, FHFA Report Near-Record Home Price Growth February home prices continued their rapid growth, but analysts hinted at a coming slowdown in-home price growth as would-be buyers were faced with rising mortgage rates and affordability concerns. S&P Case-Shiller’s National Home Price Index reported year-over-year home price growth of 19.80 percent as compared to January’s national home price growth rate of 19.10 percent. The 20-City Home Price Index reported the top three cities for year-over-year home price growth were Phoenix, Arizona with 32.90 percent growth, Tampa, Florida reported 32.60 percent growth in home prices, and Miami, Florida reported year-over-year home price growth of 29.70 percent. All cities reported in the 20-City Home Price Index had double-digit growth in February and the pace of home price growth was faster for all 20 cities than in January. In related news, the Federal Housing Finance Administration reported that home prices for homes owned by Fannie Mae and Freddie Mac rose by 19.40 percent year-over-year and were 2.10 percent higher month-to-month. Pending home sales were lower in March by -1.20 percent, as compared to the expected reading of -1,80 percent and February’s reading of -4.00 percent. Rising inflation and home prices created affordability concerns for first-time and moderate-income homebuyers. Mortgage Rates Mixed, Jobless Claims Fall Freddie Mac reported a lower average rate for 30-year fixed-rate mortgages dropped by one basis point to 5.10 percent; rates for 15-year fixed-rate mortgages averaged 4.40 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.78 percent and three basis points higher. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent. New jobless claims fell last week with 180,000 initial claims filed as compared to 185,000 first-time claims filed in the previous week. Continuing jobless claims held steady with 1.41 million ongoing claims filed and matched the prior week’s reading. The University of Michigan’s Consumer Sentiment Index fell by one-half point in April with an index reading of 65.2. The expected reading of 65.7 matched the March reading. Concerns over rising inflation, fuel prices, and the war in Ukraine contributed to lower consumer sentiment. What’s Ahead This week’s scheduled economic news includes readings on public and private-sector jobs growth, the national unemployment rate, and a news conference by Fed Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims will also be published.Last week’s economic reporting included readings from S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency House Price Index, and the Commerce Department on sales of new homes. Weekly readings on mortgage rates and jobless claims were also reported.

S&P Case-Shiller, FHFA Report Near-Record Home Price Growth

February home prices continued their rapid growth, but analysts hinted at a coming slowdown in-home price growth as would-be buyers were faced with rising mortgage rates and affordability concerns. S&P Case-Shiller’s National Home Price Index reported year-over-year home price growth of 19.80 percent as compared to January’s national home price growth rate of 19.10 percent. The 20-City Home Price Index reported the top three cities for year-over-year home price growth were Phoenix, Arizona with 32.90 percent growth, Tampa, Florida reported 32.60 percent growth in home prices, and Miami, Florida reported year-over-year home price growth of 29.70 percent. All cities reported in the 20-City Home Price Index had double-digit growth in February and the pace of home price growth was faster for all 20 cities than in January.

In related news, the Federal Housing Finance Administration reported that home prices for homes owned by Fannie Mae and Freddie Mac rose by 19.40 percent year-over-year and were 2.10 percent higher month-to-month. 

Pending home sales were lower in March by -1.20 percent, as compared to the expected reading of -1,80 percent and February’s reading of -4.00 percent. Rising inflation and home prices created affordability concerns for first-time and moderate-income homebuyers.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported a lower average rate for 30-year fixed-rate mortgages dropped by one basis point to 5.10 percent; rates for 15-year fixed-rate mortgages averaged 4.40 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.78 percent and three basis points higher. Discount points averaged  0.80 percent for 30-year fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell last week with 180,000 initial claims filed as compared to 185,000 first-time claims filed in the previous week. Continuing jobless claims held steady with 1.41 million ongoing claims filed and matched the prior week’s reading.

The University of Michigan’s Consumer Sentiment Index fell by one-half point in April with an index reading of 65.2. The expected reading of  65.7 matched the March reading. Concerns over rising inflation, fuel prices, and the war in Ukraine contributed to lower consumer sentiment.

What’s Ahead

This week’s scheduled economic news includes readings on public and private-sector jobs growth, the national unemployment rate, and a news conference by Fed Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims will also be published.

27
Apr
By First Rate Financial Group
Financial Reports

Case-Shiller, FHFA Post New Records for Home Price Growth

Case-Shiller, FHFA Post New Records for Home Price GrowthS&P Case-Shiller’s National Home Price Index rose by 19.80 percent year-over-year in February and was the third-largest pace of home price growth since the National Home Price Index’s inception. The 20-City Home Price Index reported that Phoenix, Arizona held its first-place ranking with year-over-year home price growth of 32.90 percent. Tampa, Florida maintained its second-place standing with year-over-year home price growth of 32.60 percent. Miami, Florida reported year-over-year home price growth of 29.70 percent year-over-year. Home prices rose faster for all 20 cities in February than in January.

Rapid Home Price Growth Expected to Slow as Rising Mortgage Rates Take Hold

All 20 cities included in the 20-City Home Price Index posted double-digit price growth in February, but analysts cautioned that the two-month lag in reporting didn’t accurately reflect current market conditions.  Recent data on home sales and mortgage applications indicated that demand for homes is slowing due to affordability challenges caused by rapidly rising home prices and mortgage rates. Economists expect the housing market to cool as would-be home buyers face mortgage qualification and affordability challenges.

Craig J. Lazzara, managing director of S&P Dow Jones Indices, said: “The macroeconomic environment is evolving rapidly and may not support extraordinary home-price growth for much longer.” Mr. Lazzara also said that rising mortgage rates have not yet impacted home-price data, but would likely do so soon.

Selma Hepp, a  chief deputy economist at CoreLogic, said: “With diminished buying power and mortgage rates pushing above five percent in recent weeks, home- price growth is likely to take a step back in coming months.” Economists generally expect home price growth to slow as sales volume declines.

FHFA Reports  Record Home Price Growth in February

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported that home prices rose by 19.40 percent year-over-year; home prices for single-family homes owned by Fannie Mae and Freddie Mac rose by 1.10 percent from January to February.  FHFA reported higher home prices across all nine census divisions. Home prices grew fastest in the Mountain Division, where home prices rose by 24.30 percent year-over-year in February.

Will Doerner, Ph. D   and Supervisory Economist at FHFA’s Division of Research and Statistics, said: “House prices rose to a new historical record in February. Acceleration approached twice the monthly rate as seen a year ago. Housing prices continue to rise owing in part to supply constraints.” Rising materials costs, labor, and lot shortages continued to rein in new home construction.

25
Apr
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 25, 2022

What's Ahead For Mortgage Rates This Week - April 25, 2022Last week’s economic reporting included the National Association of Home Builders Housing Market Index, government readings on housing starts and building permits, and data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Builder Confidence in Housing Market Conditions Slips by Two Points

Homebuilder confidence fell by two points to an index reading of 77 in April and was the lowest reading since September. Analysts expected this dip as mortgage rates and building materials costs continued to rise. Index readings over 50 indicate that most builders have positive views of housing market conditions. Index readings haven’t fallen below 50 since the beginning of the pandemic in April and May of 2020.

Robert Dietz, the chief economist for the NAHB, said: “The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices, and escalating materials costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.”

Analysts viewed the combined impact of rising home prices and mortgage rates as obstacles to affordability that would disproportionately affect first-time and moderate-income homebuyers.

Building permits held steady in March with 1.87 million permits issued at a seasonally-adjusted annual pace; analysts expected a reading of 1.82 million building permits issued. Likewise, housing starts were unchanged in March from February’s seasonally-adjusted annual pace of 1.79 million housing starts. Analysts predicted a reading of 1.73 million housing starts.

The National Association of Realtors® reported a slower pace of sales for previously-owned homes in March.5.77 million pre-owned homes were sold on a seasonally-adjusted annual pace as compared to a seasonally adjusted annual pace of 5.93 million previously-owned homes sold in February. Rising mortgage rates and home prices sidelined some first-time and moderate-income buyers and caused sales of previously-owned homes to fall.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported that the average rate for 30-year fixed-rate mortgages surpassed five percent last week at 5.11 percent. The average rate for 15-year fixed-rate mortgages rose by 21 basis points to 4.38 percent. Rates for 5/1 adjustable rate mortgages rose by six basis points on average to 3.75 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell last week with 184,000 first-time claims filed as compared to 186,000 initial claims filed in the previous week. Continuing jobless claims were also lower with 1.42 million claims filed last week as compared to the prior week’s reading of 1.45 million continuing jobless claims filed. 

What’s Ahead

This week’s scheduled economic reports include readings on home prices, new and pending home sales, and reports on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.