24
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 24, 2021

What's Ahead For Mortgage Rates This Week - May 24, 2021Last week’s economic reporting included readings from the National Association of Home Builders, data on sales of existing homes, and reports on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builder Confidence Unchanged in May

The National Association of Home Builders Housing Market Index reading for May was unchanged from April’s reading of 83. Readings higher than 50 indicate that most home builders were positive about housing market conditions.

Component readings for builder confidence in housing market conditions in May were mixed; builder confidence in current market conditions was unchanged with an index reading of 83; builder confidence in market conditions in the next six months rose one point to 81 and builder confidence in buyer traffic in new single-family housing developments dropped one point to 73. Readings for buyer traffic rarely exceeded 50 before the pandemic.

Robert Dietz, NAHB’s chief economist said that costs of land, labor, and building materials were expected to rise throughout 2021 and would drive home prices higher. Lower interest rates, shortages of pre-owned homes for sale, and interest in relocating to less congested suburban and rural areas continued to increase demand for single-family homes against severe shortages of homes for sale. Rapidly rising home prices squeezed first-time and moderate-income home buyers out of the market and caused some sales to fall through.

Sales of previously-owned homes fell in April and supported concerns about shortages of available homes. 5.85 million homes were sold on a seasonally adjusted annual basis, which was lower than the expected reading of 6.02 million sales and the March reading of 6.01 million sales of previously-owned homes. Rising home prices and short supplies of homes for sale continued to create high demand for homes.

Housing Starts Fall in April; Building Permits Issued Rise

The Commerce Department reported a sharp decrease in housing starts in April with 1.57 million starts on a seasonally-adjusted annual basis. March housing starts were revised downward to 1.73 million starts, but this did not affect April’s reading being the highest pace of housing starts since 2006. Housing starts fell in the Midwest and South and rose in the Northeast and West.

Building permits held steady in April at a seasonally-adjusted annual pace of 1.76 million permits issued. Analysts expected 1.77 million building permits issued.

Mortgage Rates Rise; Jobless Claims Mixed

Mortgage rates rose last week as rates for 30-year fixed-rate mortgages rose by six basis points to 3.00 percent on average. Rates for 15-year fixed-rate mortgages averaged 2.79 percent and were three basis points higher. Rates for 5/1 adjustable rate mortgages were unchanged at an average rate of 2.59 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 444,000 initial claims filed last week from the previous week’s reading of 478,000 new claims filed. Continuing jobless claims rose to 3.75 million claims filed as compared to the prior week’s reading of  3.64 million ongoing jobless claims filed.

What’s Ahead

This week’s economic reporting includes readings from Case-Shiller Home Price Indices, data on new and pending home sales, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims will also be released.

17
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 17, 2021

What's Ahead For Mortgage Rates This Week - May 17, 2021Last week’s economic reports included readings on inflation, core inflation, and the University of Michigan’s  Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also released.

April Inflation Rate Hits 13-Year High

The federal government’s Consumer Price Index rose by 0.80 percent in April as compared to the March reading of 0.60 percent. Analysts expected inflation to increase by 0.20 percent in April. Core inflation, which excludes volatile food and fuel sectors, rose by 0.90 percent in April. Analysts expected core inflation to grow by 0.30 percent in April which would have been unchanged from the March reading of 0.30 percent Core inflation rose month-to-month at the fastest pace in forty years and grew by three percent year-over-year, which was the highest growth rate since September 2008.

Consumer gas prices surpassed $3.00 per gallon for the first time since 2014; last week’s shutdown of Colonial Pipeline’s main transmission line was expected to drive gasoline prices higher. Prices of used cars and trucks rose 10 percent in April and contributed to a 21 percent increase in used vehicle prices year-over-year. Costs for shelter rose 2.10 percent year-over-year and were 0.0 percent higher month to month. Analysts noted that high inflation rates are caused in part by the low pace of inflation reported during the pandemic. Inflation Growth percentages are higher than they would have been if inflation had not slowed during the pandemic.

Mortgage Rates, Jobless Claims, and Consumer Sentiment Fall

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.94 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.26 percent and were four basis points lower; the average rate for 5/1 adjustable rate mortgages dropped by 11 basis points to 2.59 percent. Discount points averaged 0.70 percent, 0.60 percent, and 0.30 percent respectively.

First-time jobless claims were lower last week with 473,000 initial claims filed as compared to the prior week’s reading of 507,000 new jobless claims filed. Continuing jobless claims were also lower with 3.66 million ongoing claims filed; 3.70 million continuing jobless claims were filed in the prior week. The University of Michigan’s Consumer Sentiment Index reading was lower in May with a reading of  82.8 as compared to the expected reading of  90.1 and April’s index reading of 88.3.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing markets, data on sales of previously-owned homes,  and Commerce Department readings on housing starts and building permits issued. Minutes of the Fed’s most recent Federal Open Market Committee meeting will be released along with weekly readings on mortgage rates and jobless claims

03
May
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – May 3, 2021

What's Ahead For Mortgage Rates This Week - May 3, 2021Last week’s economic reporting included readings from Case-Shiller Home Price Indices, data on pending home sales, and a statement from the Fed’s Federal Open Market Committee. The University of Michigan released its Consumer Sentiment Index and weekly reports on mortgage rates and jobless claims were also published.

Case-Shiller: February Home Prices Rose at Fastest Pace Since 2006

National home prices rose at a seasonally adjusted annual pace of 12.00 percent, which was the fastest pace of year-over-year home price growth in 15 years.  Case-Shiller’s 20-City Home Price Index reported 11.90 percent home price growth year-over-year and 1.20 percent growth month-to-month. All 20 cities reported in
February.

Phoenix, Arizona held its lead with 17.40 percent year-over-year home price growth followed by San Diego, California with 17.00 percent annual home price growth. Seattle, Washington reported 15.40 percent year-over-year home price growth. Rapidly rising home prices were fueled by high demand for homes and slim supplies of homes for sale. Mortgage rates remained below three percent, but rising home prices presented obstacles for first-time and moderate-income buyers as they competed with cash buyers and well-qualified buyers.

The Federal Housing Finance Agency reported that home prices for single-family homes owned or financed by Fannie Mae and Freddie Mac grew by 12.20 percent year-over-year and 0.90 percent month-to-month.

Federal Reserve Holds Benchmark Interest Rate Range Steady

The Federal Open Market Committee of the Federal Reserve voted to hold its key interest rate range steady at 0.00 to 0.25 percent. Although the Fed noted that the economy was improving, Fed Chair Jerome Powell said that the Fed was far from achieving its dual goal of achieving maximum employment and an annual inflation rate of 2.00 percent.

Pending home sales data provided further evidence of economic improvement in March; Home sales for which offers were received but not completed rose to a year-over-year pace of 1.90 percent. Analysts expected pending home sales to grow by 5.40 percent after February’s negative reading of -10.60 percent growth for pending home sales. Pending home sales usually depend on mortgage approval to be completed; lower mortgage rates encouraged buyers to enter the market, but high home prices and strict mortgage approval requirements could cause some pending sales to fall through.

Mortgage Rates, Jobless Claims

Freddie Mac reported little change in average fixed mortgage rates last week. Rates for a 30-year fixed-rate mortgage averaged 2.98 percent and rose by one basis point. Rates for 15-year fixed-rate mortgages averaged 2.31 percent and were two basis points higher. The average rate for 5/1 adjustable rate mortgages fell by 19 basis points to 2.64 percent; discount points for fixed-rate mortgages averaged 0.70 percent and rates for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell to 553,000 initial claims filed as compared to the prior week’s reading of 566,000 first-time claims filed in the prior week.