08
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 8, 2021

What's Ahead For Mortgage Rates This Week - March 8, 2021Last week’s scheduled economic news included readings on construction spending and labor sector reports on public and private sector jobs. The national unemployment rate was published along with weekly readings on mortgage rates and jobless claims. Federal Reserve Chair Jerome Powell also spoke at a jobs summit.

Construction Spending Rises in January

U.S construction spending rose at a seasonally-adjusted annual pace of 1.70 percent in January as compared to 1.10 percent growth reported in December. Year-over-year construction spending was 5.80 percent higher in January 2021.  Residential construction spending reported in January rose to $713 billion on a seasonally-adjusted annual basis as compared to December 2020’s construction spending pace of $695.70 billion.

Non-residential construction spending in the private sector rose to a seasonally-adjusted annual rate of $447 billion in January as compared to December 2020’s pace of $445.2 billion.

High demand for single-family homes persists as inventories of available homes fall. This scenario contributes to affordability issues that are also influenced by rising building materials costs.

Mortgage Rates, Jobless Claims Mixed

Freddie Mac reported higher rates for 30-year fixed-rate mortgages, which rose by five basis points and averaged 3.02 percent. Rates for 15-year fixed-rate mortgages were unchanged from the prior week and averaged 2.34 percent. Mortgage rates for 5/1 adjustable rate mortgages dropped by 26 basis points and averaged 2.73 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

First-time jobless claims rose to 745,000 new claims filed as compared to the prior week’s reading of 736,000 new claims filed. Ongoing jobless claims fell last week with 4.30 million continuing claims filed; 4.42 million ongoing claims were filed during the prior week.

Private- Sector Jobs Fall as Public-Sector Jobs Increase

ADP reported 117,000 private-sector jobs added in February as compared to January’s reading of 195,000 private-sector jobs added. The government’s Non-Farm Payrolls report for February showed 379,000 public and private sector jobs added in February; 166,000 public and private-sector jobs were added in January. The national unemployment rate fell to 6.20 percent as compared to January’s reading of 6.30 percent.

Fed Chair Promised to Hold Steady on Monetary Policy

Fed Chair Jerome Powell promised to maintain accommodative monetary policies for the foreseeable future as the Federal Reserve continues striving toward its dual mandate of achieving maximum employment and annual inflation of two percent. When asked about rising long-term rates, Mr. Powell said that he could not commit to reducing the Fed’s asset purchases as he thought that the Fed’s goal of achieving maximum employment was “highly unlikely.”

What’s Ahead

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

01
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 1, 2021

What's Ahead For Mortgage Rates This Week - March 1, 2021Last week’s economic reports included readings from Case-Shiller on home prices, the Federal Housing Finance Agency also reported on home prices and the Commerce Department released data on sales of new homes and pending home sales. The University of Michigan released its Consumer Sentiment Index, and weekly readings on mortgage rates and jobless claims were released.

Case-Shiller Home Price Indices Report Fastest Price Growth in 7 Years

The S&P Case Shiller National Home Price Index reported December home prices rose at the fastest pace since 2014. The National Home Price Index posted a year-over-year home price growth rate of 10.40 percent in December as compared to November’s home price growth rate of 9.50 percent.

Case-Shiller’s 20-City Home Price Index posted December home price growth at a year-over-year pace of 10.10 percent as compared to November’s home price growth rate of 9.20 percent according to Case-Shiller’s 20-City Home Price Index. Phoenix, Arizona home prices rose at a seasonally-adjusted annual pace of 14.40 percent; Seattle, Washington home prices held second place with 13.60 percent growth, and San  Diego, California held third place in the 20-City Home Price Index with 13.00 percent home price growth. 18 of 19 cities reported higher home prices;  Detroit Michigan did not report data for December.

The Federal Housing Finance Agency reported year-over-year home price growth of 11.40 percent in December for homes owned or financed by Fannie Mae and Freddie Mac. High demand for homes and short inventories of available and affordable homes created challenges for first-time and moderate-income home buyers. Builders said that rising materials costs and labor shortages continued to impact new home construction.

 

New Home Sales Increase as Shortages of Pre-Owned Homes Persist

The Census Bureau reported 823,000 sales of new homes in January on a seasonally-adjusted annual basis. Analysts expected 850,000 sales based on December’s reading of 885,000 new homes sold. Homebuyers are turning to new homes as supplies of previously-owned homes are in short supply. Shortages of previously-owned homes continued as homeowners stayed in their homes due to economic uncertainty, unemployment, and ongoing concerns over the pandemic.

 Pending home sales fell by – 2.80 percent in January as compared to December’s reading of – 0.50 percent.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose 16 basis points to 2.97 percent; the average rate for 15-year fixed-rate mortgages rose 15 basis points to 2.34 percent. Rates for 5/1 adjustable rate mortgages averaged 22 basis points higher at 2.99 percent. Discount points averaged 0.60 percent for fixed-rate home loans and 0.10 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 730,000 new claims filed from the prior week’s reading of  841,000 initial jobless claims filed. Ongoing jobless claims were also lower; 4.42 million continuing claims were filed last week as compared to 4.52 million ongoing claims filed in the prior week.

The University of Michigan reported an index reading of 76.80 for its Consumer Sentiment Index in February, as compared to January’s index reading of  76.20.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

22
Feb
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – February 22, 2021

What's Ahead For Mortgage Rates This Week - February 22, 2021Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued along with data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders Index Rises One Point in February

Homebuilder confidence rose by one index point to 84 according to the National Association of Home Builders Housing Market Index. Readings over 50 in the Housing Market Index indicate that most homebuilders are confident about U.S. housing market conditions.

Component readings for the housing market index were mixed in February. Builder confidence in current market conditions for new single-family homes was unchanged with an index reading of 90; builder confidence in new home sales for the next six months fell by three points to a reading of 83. Builder confidence in buyer traffic in new single-family developments rose four points to an index reading of 72.  Before the pandemic, readings for buyer traffic in new housing developments were typically below 50, but the pandemic has created more interest in new single-family homes as families moved from congested urban areas to suburban areas.

Builders cited ongoing concerns including rising materials costs and affordability issues for first-time and low-income homebuyers.

Housing Starts Lower in January as Building Permits Rise

The Commerce Department reported fewer housing starts in January based on 1.58 million starts reported on a seasonally-adjusted annual basis, 1.67 million starts were reported in December and analysts expected a pace of 1.68 million housing starts for January.

Building permits issued rose in January to a seasonally-adjusted annual pace of 1.88 million permits. Analysts expected a reading of 1.67 million permits issued based on 1.70 million permits issued in December. Winter weather conditions likely contributed to fewer housing starts, but builders took out more building permits in anticipation of improving weather and continuing demand for homes due to shortages of available homes for sale and higher demand due to the covid-19 pandemic.

The National Association of Realtors® reported 6.69 million sales of previously-owned homes on a seasonally adjusted annual basis as of January. Low inventories of available homes and high demand for single-family homes continue to drive home sales during the pandemic. Rising home prices caused by high demand and low inventories of homes for sale created affordability issues in suburban areas as well as traditionally high-priced metro areas.

Mortgage Rates Rise, Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by eight basis points to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 2.77 percent and two basis points lower than the prior week.

Weekly jobless claims data was mixed last week with 861,000 initial jobless claims filed as compared to the prior week’s reading of 848,000 first-time jobless claims filed. Ongoing jobless claims fell to 4.49 million continuing claims as compared to the prior week’s reading of 4.56 million continuing jobless claims filed.

What’s Next

This week’s scheduled economic readings include S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency’s Home Price Index, and data on pending home sales. The University of Michigan will issue its reading on consumer sentiment and weekly readings on mortgage rates and jobless claims will also be published.