01
Nov
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 1, 2021

What's Ahead For Mortgage Rates This Week - November 1, 2021Last week’s economic reports included readings on home price growth from S&P Case-Shiller Home Price Indices, data on new home sales, and the University of Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also published. 

Case-Shiller: Home Price Growth Slower, but Prices Aren’t Falling

National home prices rose by a seasonally-adjusted annual pace of 19.80 percent in August, which was incrementally lower than July’s year-over-year home price growth rate. Analysts said that rising mortgage rates caused some buyers to leave the market and eased demand in areas where bidding wars drove home prices beyond market value in some areas.

The S&P Case-Shiller 20-City Home Price Index reported a seasonally-adjusted annual pace of  19.70 percent growth for August home prices in metro areas included in the index. Home price growth was slower than July’s year-over-year reading of 20.00 percent. Phoenix, Arizona held the top position with year-over-year home price growth of 33.30 percent. San Diego, California maintained second place with year-over-year home price growth of 26.20 percent. Tampa, Florida displaced previous holders of third place with its home price growth rate of 25.90 percent.

Craig J. Lazzara, managing director and global head of index investment strategy at  S&P Dow Jones Indices, said: “Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.”

The Federal Housing Finance Administration, which oversees Fannie Mae and Freddie Mac, published similar results for home price growth in August. Lynn Fisher, deputy director for research and statistics at FHFA, said, “Annual house price gains remained extremely high in August, but the pace of month-over-month gains continues to decelerate…This suggests we may have seen the peak in annual home price  gains for the time being.”

Recent home price growth was driven by high demand for homes and limited supplies of new and pre-owned homes for sale, but rapidly rising home prices and mortgage rates sidelined some buyers.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose five basis points to 3.14 percent. Rates for 15-year fixed-rate mortgages rose four basis points and averaged 2.37 percent. The average rate for a  5/1 adjustable-rate mortgage rose two basis points to 2.56 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 281,000 first-time claims filed as compared to the prior week’s reading of 291,000 new claims filed. Ongoing jobless claims filed also decreased with 2.24 million continuing claims filed as compared to 2.48 million continuing jobless claims filed during the prior week.

The University of Michigan’s Consumer Sentiment Index for October rose to an index reading of 71.7 as compared to September’s reading of 71.4. Analysts expected a reading of 71.9 for October.

What’s Ahead

This week’s scheduled economic news includes readings on construction spending, the post-meeting statement, and a press conference from the Fed’s Federal Open Market Committee and Fed Chair Jerome Powell. Data on public and private-sector jobs will be released along with the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be published.

25
Oct
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – October 25, 2021

What's Ahead For Mortgage Rates This Week - October 25, 2021Last 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.

18
Oct
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – October 18, 2021

What's Ahead For Mortgage Rates This Week - October 18, 2021

Last week’s economic reporting included readings on inflation, core inflation, and minutes of the Fed’s Federal Open Market Committee meeting held on September 22 and 23. Weekly readings on mortgage rates and jobless claims were also published.

September’s Consumer Price Index rose by 0.10 percent to 0.40 percent. The Core Consumer Price Index for September, which excludes volatile food and fuel sectors, rose by 0.10 percent to 0.20 percent and fell short of the expected reading of 0.30 percent growth.

Feds’ FOMC Meeting Minutes: Policymakers Consider Tapering Securities Purchases

Minutes of the Federal Open Market Committee meeting held September 21 and 22 indicated that policymakers discussed when to taper the Fed’s purchase of U.S. Treasuries and Mortgage-Backed Securities. Opinions were mixed as some policymakers recommended faster tapering of asset purchases and others were concerned about the potentially negative impact on financial markets if the Fed reduced its asset purchases too quickly. No specific dates for tapering asset purchases were set during the current FOMC meeting, but analysts expected the Committee to announce its plan for tapering asset purchases at its next meeting.

FOMC members also discussed inflation and were divided on their forecasts for inflation. While some members expected high inflationary growth in 2022, other FOMC members said that Covid-related bottlenecks in supply chains caused higher inflation in the near term.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose by six basis points to 3.05 percent. The average rate for 15-year fixed-rate mortgages rose by seven basis points to 2.30 percent; rates for 5/1 adjustable-rate mortgage rose averaged 2.55 percent and were three basis points higher Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 293,000 new claims filed as compared to the previous week’s reading of 329,000 first-time claims filed. Continuing jobless claims also fell with 2.59 million ongoing claims filed; 2.73 million ongoing claims were filed in the previous week.

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders on housing market conditions. Reporting on sales of previously-owned homes, housing starts, and building permits issued are expected; weekly readings on mortgage rates and jobless claims will also be released.