Mortgage Rates

Last week’s scheduled economic reporting included readings on inflation and a preliminary report on consumer sentiment. Weekly reports on mortgage rates and jobless claims were also released.

Inflationary Growth Exceeds Expectations, Creates Consumer Challenges

October’s inflation rate rose to its highest year-over-year pace in 31 years last week with a reading of 6.20 percent growth as compared to September’s year-over-year growth rate of 5.40 percent. Inflation rose by 0.90 percent month-to-month in October as compared to September’s reading of 0.40 percent growth. Consumers paid more for essential goods including food, fuel, and transportation. October’s inflationary growth rate surpassed the Federal Reserve’s inflationary goal of 2.00 percent year-over-year.

Pandemic-related conditions continued to delay supply chains and further limited goods and services available to consumers. Auto prices were higher due to lower production and falling inventories. Slim supplies and high demand caused rising prices in many economic sectors. Rising prices currently outstrip income growth, which renders current inflationary conditions unsustainable for many consumers.

Core inflation, which excludes volatile food and fuel sectors, rose by 0.60 percent in October and exceeded predictions of an 0.40 percent increase based on September’s reading of 0.20 percent month-to-month core inflation.

The Federal Reserve recently described ongoing high inflation as “transitory,” but it appears to be going nowhere anytime soon.

Mortgage Rates Fall; Jobless Claims Mixed

Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by 11 basis points to 2.98 percent. Rates for 15-year fixed-rate mortgages averaged 2.27 percent and were eight basis points lower. Rates for 5/1 adjustable rate mortgages averaged 2.53 percent and one basis point lower. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.40 percent for 5/1 adjustable rate mortgages.

Last week’s new jobless claims fell to 267,000 initial claims filed as compared to the previous week’s reading of 271,000 first-time claims filed. Continuing jobless claims rose to 2.16 million claims filed as compared to the reading of 2.10 million ongoing claims filed in the prior week.

The University of Michigan released its preliminary reading for November’s Consumer Sentiment Index and reported a November index reading of 66.8, which was lower than the expected reading of 72.0 and October’s index reading of 71.7. Consumer concerns over growing inflation and higher costs caused consumer sentiment about current economic conditions to dip.

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders’ Housing Market Index, along with readings on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims will also be released.

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

NAHB: Builder Confidence Improves in September

The National Association of Home Builders reported an index reading of 80 for its September Housing Market Index. Analysts expected September’s index reading to match August’s reading of 76. Builders continued to face supply chain challenges and labor shortages amid growing concerns over rising home prices and affordability for would-be home buyers.

Component readings for the Housing Market Index also showed rising builder confidence. The index for current housing market conditions rose five points to an index reading of 87; builder confidence in housing market conditions over the next six months rose three points to 84. The gauge for buyer traffic in new single-family housing developments rose four points to an index reading of 65.

Robert Dietz, the chief economist for the NAHB, said “Policymakers must focus on fixing the broken supply chain. This will spur more construction and help ease upward pressure on home prices.”

Continuing supply chain problems caused some builders to limit building due to concerns over materials costs and availability. Shortages of small and medium homes would cause home prices to rise just as interest rates are expected to rise. These conditions add to concerns over affordability for first-time and modest-income home buyers.

NAHB HMI readings over 50 indicate that most builders surveyed have a positive outlook on housing market conditions.

September sales of previously-owned homes rose to 6.29 million homes sold on a seasonally-adjusted annual basis as compared to August’s reading of 5.88 million previously-owned homes sold and expectations of 6.10 million previously-owned homes sold. Increasing sales of pre-owned homes indicated that severe shortages of available homes during the pandemic were easing.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as rates for a 30-year fixed-rate mortgage rose four basis points to 3.09 percent; rates for 15-year fixed-rate mortgages averaged three basis points higher at 2.33 percent. Rates for 5/1 adjustable rate mortgages fell one basis point to an average rate of 2.54 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 290,000 claims filed from the previous week’s reading of 296,000 first-time claims filed. Analysts expected 300,000 first-time claims to be filed. Fewer continuing jobless claims were filed last week; 2.48 million ongoing jobless claims were filed as compared to 2.60 million ongoing jobless claims filed in the previous week.

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Home Price Indices, reports on sales of new and previously-owned homes, and the University of  Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims will also be published.

Last week’s scheduled economic news included readings on public and private-sector jobs and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also published.

Non-Farm Payrolls: Jobs Growth Dips Sharply in September

U.S. jobs growth dipped sharply in September according to the federal government’s Non-Farm Payrolls report. 194,000 public and private sector jobs were added and fell far short of the expected reading of 500,000 jobs added. 366,000 public and private sector jobs were added in August. Hiring lagged as continuing concerns over Covid kept workers at home. Less hiring at public schools reduced September’s jobs growth at a time when schools traditionally hire for the upcoming school year.

ADP reported 568,000 private-sector jobs added in September; analysts expected 425,0000 jobs added based on 340,000 private-sector jobs added in August. In related news, the national unemployment rate fell to 4.80 percent in September as compared to August’s jobless rate of 5.20 percent. Analysts expected the national unemployment rate to drop to 5.10 percent in September.

Mortgage Rates Mixed, Jobless Claims Fall

Fixed mortgage rates fell last week as the average rate for a 30-year fixed-rate mortgage fell two basis points to 2.99 percent; rates for 15-year fixed-rate mortgages fell by five basis points on average to 2.23 percent. The average rate for 5/1 adjustable rate mortgages rose by four basis points to 2.52 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages

New and continuing jobless claims fell last week as 326,000 initial jobless claims were filed as compared to the previous week’s reading of 364,000 first-time claims filed. Analysts expected 345,000 initial jobless claim filings. 2.71 million continuing jobless claims were filed last week as compared to the previous week’s reading of 2.81 million ongoing jobless claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.