Mortgage Rates

Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, along with Commerce Department readings on housing starts and building permits issued. The National Association of Realtors® reported on sales of previously-owned homes; weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders’ Housing Market Index Falls in January

Homebuilder confidence in housing market conditions fell three points to an index reading of 83 in January. The National Association of Home Builders Housing Market Index expected a reading of 85 for January as compared to December’s index reading of 86. Increasing covid-19 cases and rising materials costs caused builder confidence to fall as builder concerns rose.

The NAHB Housing Market Index remained strong as any reading over 50 indicates positive builder sentiment toward housing markets. Component readings for January’s Housing Market Index also fell; builder confidence in current market conditions fell two points to an index reading of 90. Homebuilder confidence in market conditions for the next six months also fell two points to 83. Builder confidence in buyer traffic in new housing developments dropped five points to an index reading of 68. Readings of more than 50 for buyer traffic were rare until the covid-19 pandemic started.

Conflicting factors impacted home builder confidence readings. Home sales rose as urban homeowners sought new and larger homes in the suburbs and rural areas, labor shortages, and rising materials expenses worried home builders.

Housing Starts and Building Permits Rose in December

The Commerce Department reported a seasonally-adjusted annual pace of 1.67 million housing starts as compared to November’s reading of 1.547 million starts. Building permits issued rose in December with 1.709 million permits issued annually as compared to November’s reading of 1.635 million housing starts.

The National Association of Realtors® reported 6.76 million sales of previously-owned homes sold as of December on a seasonally-adjusted annual basis. Home sales are increasing although demand exceeds available inventory and home prices continue to rise.

Mortgage Rates, Jobless Claims Lower

Mortgage rates fell last week with the average rate for 30-year fixed-rate mortgages two basis points lower on average at 2.77 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points lower. Rates for 5/1 adjustable rate mortgages averaged 2.80 percent and 32 basis points lower. 

First-time jobless claims fell to 900,000 claims filed as compared to the prior week’s reading of 926,000 new claims filed. Ongoing jobless claims were also lower last week with 5.05 million continued claims filed as compared to 5.18 million claims filed the previous week. 

What’s Ahead

This week’s scheduled economic reporting includes readings from Case-Shiller Home Price Indices, the FHFA House Price Index, and the Federal Reserve’s Statement from its Federal Open Market Committee. Monthly readings on new home sales and consumer sentiment will also be published. Weekly readings on mortgage rates and jobless claims will also be released.