24
Jan
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – January 24, 2022

What's Ahead For Mortgage Rates This Week - January 24, 2022Last week’s economic reports included readings from the National Association of Home Builders on housing markets, Commerce Department data on building permits issued, and housing starts. The National Association of Realtors® reported on sales of previously-owned homes. Weekly reports on mortgage rates and jobless claims were also released.

National Association of Home Builders: Builder Confidence Falls One Point

Supply chain issues and rising inflation concerned builders surveyed about housing market conditions in January. The National Association of Home Builders reported an index reading of 83 as compared to December’s reading of 84. While any reading over 50 is considered positive, January’s dip in builder confidence was the first decline in four months.

Component readings for the Housing Market Index also showed a slowing trend. Builder confidence in current housing market conditions was unchanged at an index reading of 90; builder confidence in housing market conditions over the next six months fell two points to 83. Builder confidence in buyer traffic in new single-family housing developments also fell by two points to 69.

NAHB Chairman Chuck Fowke said, “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19 percent since December 2020.” Softwood lumber prices rose approximately 85 percent in the last three months according to trade publication Random Lengths. Analysts said that tariffs and labor shortages have also added to the cost of residential home building.

Commerce Department readings on building permits issued and housing starts were higher in December/ 1.87 million building permits were issued on a seasonally-adjusted annual basis as compared to November’s reading of 1.72 million building permits issued. Housing starts also increased with 1.70 million starts reported as compared to November’s reading of 1.68 million housing starts. Analysts expected a seasonally-adjusted annual reading of 1.65 million single-family starts.

The National Association of Realtors® reported December’space of 6.18 million previously-owned homes sold on a seasonally-adjusted annual basis. Analysts expected 6.48 million sales, which matched November’s reading.

Mortgage Rates, Jobless Claims Rise

Mortgage rates rose last week as the average rate for 30-year fixed-rate mortgages rose by 11 basis points to 3.56 percent. The average rate for 15-year fixed-rate mortgages was 17 basis points higher at 2.79 percent. Rates for 5/1 adjustable rate mortgages averaged 2.60 percent and 31 basis points higher. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year  fixed-rate mortgages. Basis points for 5/1 adjustable rate mortgages averaged 0.30 percent. Rising mortgage rates, high demand for homes, and buyer competition continued to present challenges for first-time and moderate-income home buyers. 

286,000 initial jobless claims were filed last week and exceeded expectations of 225,000 new claims filed and the prior week’s reading of 231,000 first-time claims filed. 1.64 million continuing claims were filed as compared to the previous week’s reading of 1.55 million ongoing claims filed. 

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Home Price Indices, the Federal Reserve’s Federal Open Market Committee statement, and Fed Chair Jerome Powell’s press conference. Readings on pending home sales, inflation, and consumer sentiment are also expected Weekly readings on mortgage rates and jobless claims will also be released.

18
Jan
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – January 18, 2022

What's Ahead For Mortgage Rates This Week - January 18, 2022

Last week’s scheduled economic reporting focused on inflation with monthly and year-over-year readings on overall and core inflation. Federal Reserve Chair Jerome Powell was confirmed for a second term as Federal Reserve chair.  The University of Michigan released its monthly survey on consumer sentiment and weekly readings on mortgage rates and jobless claims were also released.

Inflation Rises in December; Nears Fastest Growth Pace in 40 Years

Year-over-year inflation rose to a pace of seven percent in December and approached its fastest growth rate in 40 years according to the Bureau of Labor Statistics. Analysts expected year-over-year inflationary growth of seven percent as compared to November’s pace of 6.80 percent. Month-to-month inflation slowed to

0.50 percent as compared to November’s month-to-month growth rate of 0.80 percent.

Housing costs, food, and automotive sectors drove inflation in December. Shortages of computer chips used in vehicles slowed production and increased demand for vehicles. New car prices rose by one percent and used-car prices rose by 3.50 percent month-to-month.

Core inflation, which excludes volatile food and fuel sectors, rose by 5.50 percent year-over-year in December and surpassed the expected reading of 5.40 percent that was based on November’s core inflation rate of 4.90 percent. Rents rose by 0.40 percent for the third consecutive month. Food prices rose by 0.50 percent month-to-month and costs for clothing and furniture also rose.

Federal Reserve Chair Jerome Powell was confirmed for a second term and addressed the Fed’s plans for slowing inflation. Mr. Powell said, “The economy no longer needs or wants the very highly accommodative policies we’ve had in place to deal with the pandemic and its aftermath.”

Energy prices fell by 0.40 percent in December and decreased for the first time since April.

Mortgage Rates Rise. Jobless Claims Mixed

Freddie  Mac reported higher mortgage rates as the average rate for 30-year fixed-rate mortgages rose by 23 basis points to 3.4

Initial jobless claims rose last week with 230,000 first-time claims filed as compared to the prior week’s reading of 207,000 initial claims filed. Analysts expected first-time claims to decrease to 200,000 initial claims filed. Ongoing jobless claims fell to 1.60 million continuing claims filed as compared to the previous week’s reading of 1.75 million ongoing jobless claims filed.5 percent; rates for 15-year fixed-rate mortgages rose 19 basis points and averaged 2.62 percent. The average rate for 5/1 adjustable rate mortgages rose 16 basis points to 2.57 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The University of Michigan’s consumer sentiment index for January reported lower consumer enthusiasm for current economic conditions with an index reading of 68.8 as compared to the expected reading of 70.0 and December’s index reading of 70.6.

What’s Ahead

This week’s scheduled economic reporting includes readings on housing markets and sales of previously-owned homes. Readings on building permits issued and housing starts will be released along with weekly readings on mortgage rates and jobless claims.

10
Jan
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – January 10, 2022

What's Ahead For Mortgage Rates This Week - January 10, 2022

Last week’s economic reporting included readings on construction spending and labor sector readings on jobs and unemployment. Weekly reports on mortgage rates and jobless claims were also released.

Construction Spending Unchanged, Falls Short of Expectations

The Commerce Department reported that construction spending rose by 0.4 percent in November to a seasonally-adjusted annual pace of $1.63 trillion and  9.30 percent year-over-year, Residential construction spending drove spending higher; month-to-month spending rose by 0.90 percent in November and was 16 percent higher year-over-year. Analysts expected overall construction spending to rise by 0.70 percent from October to November.

High demand for homes continued to drive residential construction spending, but spending on office construction fell by 32.10 percent year-over-year. Work-from-home options increased as employers and workers faced covid-related challenges.

Mortgage Rates Rise; Jobs Data Mixed

Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose 11basis points to 3.22 percent. The average rate for 15-year fixed-rate mortgages was 10 basis points higher at 2.43 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.41 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.50 percent.

First-time jobless claims rose by 207,000 claims filed as compared to the prior week’s reading of 200,000 initial claims filed. Analysts expected 195,000 new claim filings. Continuing jobless claims rose last week with 1.75 million ongoing claims filed; 1.72 million continuing jobless claims were filed in the prior week.

The government’s Non-Farm Payrolls report for December reported 199,000 public and private sector jobs added, which fell far short of the expected reading of 422,000 jobs added and November’s reading of 249,000 jobs added. Analysts said that the spread of the omicron variant of the covid virus slowed job searches and hiring.

ADP reported 807,000 private-sector jobs added in December, which surpassed expectations of 375,000 jobs added and November’s reading of 505,000 private-sector jobs added. The national unemployment rate fell to 3.90 percent as compared to the prior month’s reading of 4.20 percent. The unemployment rate is based on the number of unemployed workers actively seeking work and does not include workers who stopped looking for work.

What’s Ahead

This week’s scheduled economic reports include readings on inflation and retail sales and weekly reporting on mortgage rates and jobless claims.