23
Apr
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 23rd, 2018

What’s Ahead For Mortgage Rates This Week – April 23rd, 2018Last week’s economic reports included readings on builder confidence, housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims were also released.

NAHB: Builder Confidence Drops by One Point

The National Association of Home Builders reported that builder confidence dipped by one point in April to an index reading of 69. While any reading over 50 indicates positive builder sentiment, NAHB noted that builder sentiment has decreased for the past four months.

During the housing bubble of 2004 and 2005, builder confidence in market conditions averaged 68, but analysts said that the post bubble crash in home values was preceded by several months of decreasing builder sentiment. 

Builders are maintaining a steady approach to housing starts despite high demand in many markets. Short supplies of available homes are driving prices higher and causing issues of affordability for would be buyers. Home builders continued to face shortages of buildable lots and rising materials prices. This could account for decisions not to ramp up home construction enough to meet demand.

Housing Starts, Building Permits Rise

According to the Commerce Department, housing starts and building permits issued rose in March. 1.319 million starts were reported on a seasonally-adjusted annual basis as compared to 1.1,295 million starts in February. Analysts expected housing starts to drop in March to 1.255 million, due to rising materials costs and concerns over trade wars. Housing starts were 10.90 percent higher year-over-year.

Single-family housing starts were lower by 3.70 percent lower than for February, but were 8.00 percent higher year-over-year. This suggests that aside from seasonal fluctuations, home builders are boosting their efforts to keep up with demand for homes.

Building permits issued increased in March to 1.354 million on a seasonally-adjusted annual basis; the February reading showed 1.321 million building permits issued. Building permits issued in March were 2.50 percent higher than for February and 7.50 percent higher year-over-year.

Mortgage Rates, Jump, New Jobless Claims Dip

Freddie Mac reported higher average mortgage rates last week, with the rate for a 30-year fixed rate mortgage rising by five basis points to 4.47 percent. This was the highest average rate for 30-year fixed rate mortgages since January 2014 and the highest weekly rate increase since February. Rates for 15-year fixed rate mortgages averaged 3.94 percent and increased by seven basis points.

The average rate for 5/1 adjustable rate mortgages was six basis points higher at 3.67n percent. Discounts 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.

New jobless claims were lower last week with 232,000 new claims filed. Analysts expected 230,000 new claims based on the prior week’s reading of 233,000 new claims filed.

What‘s Ahead

This week’s economic reports include readings from Case-Shiller Home Price Indices, sales reports for new and previously-owned homes, and weekly readings on average mortgage rates and new jobless claims. A monthly reading for consumer sentiment will be released Friday.

16
Apr
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 16th, 2018

What’s Ahead For Mortgage Rates This Week – April 16th, 2018Last week’s economic reports included readings on inflation, the minutes of the most recent meeting of the Fed’s Federal Open Market Committee and weekly reports on mortgage rates and first-time jobless claims. The University of Michigan released its Consumer Sentiment Index for April.

Inflation Grows, Fed Indicates Future Rate Hikes Likely

The minutes of the Federal Open Market Committee Meeting held March 20 and 21 indicate Fed policymakers are likely to increase the target federal funds rate at their June meeting. Economic indicators including strong labor markets and low unemployment rate were cited as contributing to expectations for federal rate hikes throughout 2018.

How the Fed moves on interest rates affects private sector interest rates as financial institutions typically follow the Fed’s lead regarding raising or not raising consumer lending and mortgage rates.

FOMC minutes said that members noted increasing consumer credit card balances, but also said that sub-prime borrowers continued to have trouble in getting adequate credit at favorable interest rates.

Mortgage Rates Hold Steady, New Jobless Claims Dip

Mortgage rates were little changed last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose two basis points to an average of 4.42 percent; the average rate for a 15-year fixed rate mortgage was unchanged at 3.87 percent.

Rates for a 5/1 adjustable rate mortgage averaged one basis point higher at 3.61 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower last week with 223,000 claims filed; analysts expected 230,000 new claims filed based on the prior week’s reading of 242,000 new claims filed. In other news, the University of Michigan released its Consumer Sentiment Index with an index reading of 97.8 for April. Analysts expected a reading of 101.8, which was based on the March reading of 101.4

Consumers surveyed were fearful of possible trade wars resulting from recent tariffs on foreign goods; the consumer sentiment index dipped from its March reading of 101.4 to 97.8. Builders have said that tariffs will increase prices on building materials and such increases would drive home prices up.

What‘s Ahead

This week’s scheduled economic releases include readings on builder sentiment from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued and readings on retail sales. Weekly reports on mortgage rates and new jobless claims will also be released.

09
Apr
By support
Financial Reports

What’s Ahead For Mortgage Rates This Week – April 9th, 2018

What’s Ahead For Mortgage Rates This Week – April 9th, 2018Last week’s economic reports included readings on construction spending, mortgage rates and weekly jobless claims. Other labor-related claims included ADP payrolls, Non-Farm Payrolls and the national unemployment rate.

Construction Spending Rises in February

Construction spending was higher in February according to the Commerce Department. Spending on building projects rose by 0.10 percent in February Reuters reported that construction spending rose 0.10 percent as compared to expectations of an 0.40 percent increase and January’s unchanged reading. Seasonal weather conditions typically cause lulls in building. Analysts said that residential construction spending increased by 0.10 percent to its highest level since January 2007.

Real estate analysts have consistently indicated that building more homes is the only solution to lingering shortages of available homes in the U.S. Recent news about tariffs on foreign building materials may cause builders to wait and see how tariffs will impact business before going all-out on building homes.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; the average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent.15-year fixed rate mortgage rates averaged 3.87 percent, which was three basis points lower than the prior week. Rates for a 5/1 adjustable rate mortgage averaged 3.62 percent and were four basis points lower than for the prior week. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable-rate mortgages.

Weekly jobless claims rose to 242,000 new claims filed as compared to 225,000 new claims expected and 218,0000 claims filed the prior week.

Labor Reports Show Mixed Results

ADP reported fewer private-sector jobs created in March with 241,000 jobs created as compared to February’s reading of 246,000 new private-sector jobs. The Labor Department reported a sharp drop in Non-Farm payrolls, which measures public and private-sector job growth. 103,000 jobs were added in March as compared to February’s revised reading of 326,000 jobs added. Jobs added in March were at their lowest level since fall 2017.

Analysts put the low Non-Farm payrolls reading in perspective; on average 202,000 jobs were added monthly during the first quarter of 2018 and jobs growth was faster than during first quarters of 2016 and 2017. The national unemployment rate was unchanged at 4.10 percent; this was the lowest rate in 17 years. Low unemployment rates typically indicate few layoffs and suggest strong economic growth.

What‘s Ahead

This week’s scheduled economic releases include readings on inflation, core inflation and consumer sentiment. The Federal Open Market Committee of the Fed will release minutes from its last meeting. Weekly readings on mortgage rates and new jobless claims will also be released.