08
Apr
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 8th, 2019

What’s Ahead For Mortgage Rates This Week – April 8th, 2019Last week’s economic news included readings on construction spending and inflation; labor sector reports on the national unemployment rate, public and private sector employment were also released. Weekly readings on mortgage rates and new jobless claims were also released.

Construction Spending Rises, Retail Sales Slip

Construction spending expanded by one percent in February according to the Commerce Department spending was one percent higher month-to-month; analysts expected a negative reading of -0.10 percent. February saw a revised gain of 2.50 percent growth in construction spending.

Construction spending grew 1.10 percent year-over-year; by comparison, 2016 construction spending reached 10 percent year-over-year. High demand for homes and lower mortgage rates could compel more construction spending as the peak home-buying season starts.

Retail sales slowed in February, but January retail readings were strong. Sales dipped -0.20 percent as compared to 0.30 percent growth expected and January’s reading of 0.70 percent. Retail sales excluding automotive sales fell to a negative reading of -0.40 percent in February as compared to expected sales growth of 0.40 percent and January’s reading of 1.40 percent growth.

Mortgage Rates Mixed, New Jobless Claims

30-year fixed mortgage rates rose two basis points on average to 4.08 percent; rates for 15-year fixed rate mortgages averaged one basis point lower at 3.56 percent and rates for 5/1 adjustable rate mortgages were nine basis points lower and averaged 3.66 percent.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate and 5/1 adjustable rate mortgages.  Would-be home buyers are expected to join active buyers as lower rates hold steady and warmer weather arrives.

First-time jobless claims fell last week with 202,000 initial claims filed. Analysts expected 216,000 first-time jobless claims based on 212, 000 new jobless claims filed the prior week.

Jobs Data Varied, but Unemployment holds Steady

ADP reported 129,000 private-sector jobs added in March as compared to 197,000 jobs added in February and an expected reading of 165,000 jobs added. Loss of manufacturing jobs caused private-sector jobs growth to fall to its lowest reading in 18 months.

Government readings for public and private jobs growth was higher in March with 196,000 jobs added; this was significantly higher than February’s slim reading of 33,000 jobs added. The national unemployment rate was unchanged at 3.80 percent, which matched expectations.

What‘s Ahead

This week’s scheduled economic news includes readings on inflation, minutes from the most recent FOMC meeting and consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.

01
Apr
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 1st, 2019

What’s Ahead For Mortgage Rates This Week – April 1st, 2019Last week’s economic reports included readings from Case-Shiller on home price growth, Commerce Department readings on housing starts and building permits issued. The Conference Board issued its monthly reading on consumer confidence. Pending home sales and weekly reports on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Indices: Price Growth Slows in January

S&P Case-Shiller Indices reported the slowest rate of home price growth in six years. January readings suggested that home price growth slowed due to easing demand. Affordability concerns sidelined buyers; participation of first-time home buyers remained lower than average.

Case-Shiller’s 20-City Home Price Index charted its third month-to-month decline in home price growth; the National Home Price Index fell to 4.30 percent during the three months ending in January as compared to 4.60 percent growth for the three month period ending in October 2018.

Las Vegas, Nevada led the 20-City Home Price Index with year-over-year home price growth of 10.50 percent. Phoenix, Arizona held second place with 7.50 percent home price growth. Third place was tied by Minneapolis, Minnesota, Charlotte, North Caroline and Tampa, Florida with 5.10 percent growth. This tie suggested that home prices were leveling out, and west coast cities were notably absent from the top three spots after home prices rocketed to historic levels in recent years.

Housing Starts, Building Permits Issued

Commerce Department readings for housing starts and building permits issued were lower in February. Housing starts posted on a seasonally-adjusted annual rate of 1.162 million starts. Analysts expected 1.201 million starts based on February’s reading of 1.273 million housing starts. Single-family housing starts fell 17 percent in March.

Regional readings for housing starts were mixed: The Northeast reading was 30 percent lower; the Southern region posted 7 percent fewer starts in February and housing starts in the West fell 19 percent. The Midwest posted a positive year-over-year growth rate of 27 percent for housing starts.

Fewer building permits were issued in February with 1.295 million permits issued as compared to February’s reading of 1.317 million permits issued. While some of the slowdowns in housing starts and building permits were likely related to winter weather, real estate and mortgage lending pros continued to count on home builders to provide more homes to ease housing shortages in many cities and metro areas.

Pending home sales were lower in February; the National Association of Realtors® said pending sales were 1.00 percent lower in February, and those pending sales had declined nearly 5.00 percent year-over-year. Pending sales represent home sales for which purchase offers have been signed, but not completed.

Lawrence Yun, the chief economist for the National Association of Realtors®, said a shortage of available homes in the West coupled with rapidly rising home prices contributed to lower pending sales numbers.

Mortgage Rates, New Jobless Claims Fall

Average mortgage rates fell to their lowest readings in ten years last week. Freddie Mac reported that rates for a 30-year fixed rate mortgage averaged 22 basis points lower at 4.06 percent; the average rate for 15-year fixed rate mortgages fell 14 basis points to 3.57 percent. Rates for 5/1 adjustable rate mortgages averaged 3.75 percent and were 9 basis points lower.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Lower mortgage rates are expected to prevail as the Fed announced its decision not to raise the target federal funds rate range in 2019.

Consumer confidence fell to an index reading of 124.1 in February as compared to 131.4 in January. Analysts expected an index reading of 133, which indicates that consumers have less confidence in current economic conditions.

What‘s Ahead

This week’s scheduled economic news includes readings on retail sales, construction spending and labor sector reports on jobs and national unemployment. Weekly reports on mortgage rates and first-time jobless claims will also be released.

25
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 25th, 2019

What’s Ahead For Mortgage Rates This Week – March 25th, 2019Last week’s economic news included readings from the National Association of Home Builders, Federal Reserve Federal Open Market Committee and a press conference by Fed Chair Jerome Powell.

Sales of pre-owned homes in February were reported along with weekly readings on mortgage rates and new jobless claims.

NAHB: Builder Confidence Unchanged Despite Headwinds

Home builders remained confident about housing market conditions in March. The NAHB Housing Market Index posted a reading of 62, which matched February’s reading and fell one point short of expectations. NAHB Index readings above 50 represent a positive outlook on housing market conditions.

Home builders continued to face obstacles including high materials costs and lack of buildable lots and labor. Analysts said builders focused on building larger homes, which were not affordable for many prospective buyers.

FOMC: Fed Puts Brakes on Interest Rate Hikes

Monetary policymakers reversed course on raising the target range for federal funds and voted not to raise the current rate range of 2.25 to 2.50 percent. FOMC members cited global economic concerns including Brexit and wavering economic conditions in China.

While the U.S. Labor sector was strong with ongoing jobs and wage growth and low national unemployment, FOMC members said that the Fed could be “patient” about raising rates and did not expect to raise rates in 2019. Slowing economic growth and inflation were reasons for holding interest rates steady.

Fed Chair Jerome Powell described the current economy as “good” and said that the Fed would gradually roll back its accommodative purchase of treasury bonds. This news was likely to cause yields on 10-year Treasury notes to fall; this would cause mortgage rates to fall due to their connection with 10-year Treasury notes.

Pre-Owned Home Sales Hit 11 Month High in February

The National Association of Realtors® reported 5.50 million sales of pre-owned homes on a seasonally-adjusted annual basis. February sales reading fell short of 5.12 million sales expected but were higher than the rate of 4.93 million sales in January.

February’s reading was 11.80 percent higher than January’s sales. The sales pace was 1.80 percent lower year-over-year, but the median sale price of preowned homes was $249,500., which was 3.60 percent higher year-over-year.

First-time buyers accounted for 34 percent of sales; this falls short of the typical 40 percent participation rate for first-time buyers. Affordability and strict mortgage qualification requirements continued to challenge first-time and moderate-income buyers.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average rates for fixed rate mortgages. 30-year fixed mortgage rates were three basis points lower and averaged 4.28 percent; Mortgage rates for 15-year fixed rate mortgages averaged 3.71 percent and were five basis points lower on average. The average rate for a 5/1 adjustable-rate mortgage was unchanged at 3.84 percent. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 221,000 new claims filed. Analysts expected 225,000 new claims based on the prior week’s reading of 230,000 new claims filed.

What‘s Ahead

This week’s scheduled economic news includes readings on housing starts and building permits issued, new and pending home sales and inflation. Weekly readings on mortgage rates and new jobless claims will also be released.