22
Dec
By First Rate Financial Group
Financial Reports

NAHB: Home Builder Confidence in Housing Markets Slips in December

NAHB: Home Builder Confidence in Housing Markets Slips in DecemberDecember’s National Association of Home Builders Housing Market Index reported slipping builder confidence in U.S. housing markets. The Housing Market Index readings fell every month in 2022. Recently rising mortgage rates, materials costs, and inclement winter weather contributed to builder skepticism about current housing market conditions.

December’s National  Housing Market Index reading of 31 was the lowest since mid-2012 not including readings published during the pandemic. By comparison, the Housing Market Index reading for December 2021 was 84. The three indices comprising the Housing Market Index reported mixed readings in December. Current home sales decreased by three points and home builder expectations for home sales in the next six months increased by four points. Builder expectations of buyer traffic in new housing developments were unchanged from November’s reading.

Regional housing market indices reported mixed index readings, which are seasonally adjusted. The Northeast region reported an index reading of 32 for December, which was unchanged from November. The Midwestern region had an index reading of 30 for December, which was five points lower than November’s reading. The South reported an index reading of 35, which was two points higher than in November. The West reported an index reading of 25 for December, which was three points lower than in November.

Mortgage rates recently fell below seven percent and the pace of home price growth is slowing. High home prices and rapidly rising mortgage rates led more than 60 percent of home builders to offer a variety of buyer incentives including mortgage rate buydowns and paying discount points charged to home buyers for lower mortgage rates.

Building affordable homes: The struggle is real

NAHB home builders expect weaker housing market conditions to continue through 2023 with full recovery starting in 2024. NAHB estimates that there is a shortage of 1.5 million new homes based on buyer demand and homes currently available. Jerry Konter, the chair of NAHB, said that home builders are struggling to keep housing affordable. Construction costs rose by 30 percent since the start of 2022 and there is little room for home builders to cut home prices.

Slower home price growth and lower mortgage rates will help prospective home buyers qualify for mortgages and encourage more buyers to enter the housing market.  

12
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 12, 2022

What's Ahead For Mortgage Rates This Week - December 12, 2022Last week’s scheduled economic reports included preliminary monthly readings on inflation and consumer sentiment along with weekly reporting on mortgage rates and jobless claims.

University of Michigan Reports Slower Inflationary Growth

The University of Michigan predicted lower inflationary growth as December’s year-over-year reading for inflation fell to 4.6 percent from November’s year-over-year reading of 4.9 percent. This was the lowest inflation reading since September 2021. Analysts credited lower gasoline prices for slowing rapid inflation rates seen in recent months.

Falling gas prices also contributed to higher consumer sentiment levels reported in December’s edition of the University of Michigan’s Consumer Sentiment Index. Consumer sentiment rose to an index reading of 59.1 in December as compared to November’s reading of 56.8 and analysts’ expected reading of 56.5.

Component readings for current consumer sentiment data included consumer sentiment regarding current economic conditions and consumer views about economic conditions within the next six months. December’s index reading for consumer views of current economic conditions rose to 60.2  from November’s index reading of 58.8. The index reading for consumer views of economic conditions within the next six months rose to 58.4 from November’s reading of 55.6.

Mortgage Rates Fall, Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by 16 basis points to 6.33 percent. The average rate for 15-year fixed-rate mortgages fell by nine basis points to 5.67 percent.

First-time jobless claims rose to 230,000 claims from the previous week’s reading of 225,000 initial claims filed. Ongoing jobless claims also increased last week with 1.67 million continuing claims filed as compared to the previous week’s reading of 1.61 million ongoing jobless claims filed.

What’s Ahead

This week’s scheduled economic events include reports on inflation, the post-meeting statement of the Fed’s Federal Open Market Committee, and Fed Chair Jerome Powell’s press conference after the FOMC statement.

05
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 5, 2022

What's Ahead For Mortgage Rates This Week - December 5, 2022Last week’s economic news included readings on home prices, inflation, and data on public and private-sector jobs. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller Posts Lower Home Prices in September

September home prices fell in all cities tracked by Case-Shiller’s 20-City Home Price Index. Home prices were – 8.7 percent lower year-over-year in September than August’s reading of -10.40 percent. Home price declines showed signs of increasing after a period of rapidly rising home prices sidelined would-be home buyers.

The Federal Housing Finance Agency Home Price Index rose by 0.90 percent in September as compared to home price depreciation of -7.50 percent posted in August. Home prices rose in all 50 states and the District of Columbia between Q3 2021 and Q3 2022. States with the highest year-over-year home price growth were Florida with 22.7 percent home price growth, South Carolina with 18.4 percent home price growth, and Tennessee, where home prices rose by 17.9 percent growth. North Carolina experienced 17.4  percent growth in home prices and Georgia completed the top 5 states with the highest home price growth with 16.7 percent home price growth.

Home prices decreased in two metro areas in California; the San Francisco-San Mateo-Redwood City metro area posted a -4.3 percent decrease in home prices and the Oakland-Berkeley-Livermore metro area where home prices decreased by -0.60 percent.

Mortgage Rates, Jobless Claims

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages decreased by nine basis points to 6.49 percent. The average rate for 15-year fixed-rate mortgages fell by 14 basis points to 5.76 percent.

225,000 new jobless claims were filed last week as compared to an expected reading of 235,000 first-time claims filed and the previous week’s reading of 241,000 new jobless claims filed. 1.61 million continuing jobless claims were filed last week as compared to 1.55 million ongoing claims filed in the previous week.

The federal government’s Non-Farm Payrolls report for November showed 263,000 public and private-sector jobs added in November; analysts expected 200,000 jobs added based on October’s reading of 284,000 jobs added. ADP reported 127,000 private-sector jobs added in November as compared to analysts’ expectations of 190,000 private–sector jobs added and September’s reading of  239,000 private-sector jobs added. The national unemployment rate was unchanged from the previous week at 3.7 percent.

What’s Ahead

This week’s scheduled economic reports include readings from the University of Michigan on consumer sentiment and consumer expectations for inflation in the next five years. Weekly readings on mortgage rates and jobless claims will also be published.