Interest Rates

Last week’s economic news included readings  from the National Association of Home Builders Housing Market Index and July readings on housing starts and building permits issued. Weekly readings on initial jobless claims and mortgage rates were also released.

NAHB: Home Builder Sentiment Remains High

According to the National Association of Home Builders, builder confidence in housing market conditions rose one point to an index reading of 66 for August. Housing Market Index readings showed that builder sentiment has held steady with readings of 64 to 66; any reading over 50 indicates positive builder sentiment.

Analysts said that despite strong readings for builder confidence in recent months, Commerce Department readings on housing starts and building permits issued did not reflect high builder confidence readings. Reports on housing starts and building permits issued fall one month behind the NAHB Housing Market Index.

Housing Starts Falter as Building Permits Increase

Commerce Department readings for July showed mixed results for housing starts and building permits issued as starts fell from June’s  downwardly revised reading of 1.24 million starts to 1.19 million starts in July. Housing starts are calculated on a seasonally-adjusted annual basis.

July building permits rose from June’s reading of 1.232 million permits to 1.336 million permits issued. Analysts expected a reading of 1.287 million housing starts for July. This was the second consecutive positive reading for housing starts after a post-recession period of fewer starts.

While building permits for single-family homes traditionally outpace permits issued for multi-family housing, analysts noted that demand for multi-family housing developments is trending higher due to high prices for single-family homes.

Increasing costs for building materials, indications of  global and domestic economic uncertainty and changing consumer priorities were cited as trends impacting housing starts.

Mortgage Rates Hold Near Record  Low, New Jobless Claims Rise

Freddie Mac reported little change in mortgage rates last week; the average rate for 30-year fixed rate mortgages was unchanged at 3.60 percent. Rates for 15-year fixed rate mortgages averaged 3.07 percent and were two basis points higher.

The average rate for 5/1 adjustable rate mortgages fell one basis point to 3.35 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose last week to 220,000 new claims filed as compared to the prior week’s reading of 211,000 new jobless claims filed. Analysts expected 212,000 claims to be filed last week. Nearly 6000 new jobless claims filed in California boosted last week’s reading for new claims.

The less volatile four-week rolling report on new jobless claims rose by 1000 claims to  213,750 new claims filed. New jobless claims hit their highest level in six weeks, but were lower than average.

Consumer sentiment concerning current economic conditions fell 6.20 points to an index reading of 92.1 according to the University of Michigan monthly survey of consumer confidence in the economy. Concerns over trade wars and the Federal Reserve’s decision to lower its target interest rate range prompted consumer confidence to slip in August.

What‘s Ahead

This week’s scheduled economic news includes readings on sales of new and previously owned homes and minutes from the last meeting of the Federal Reserve’s Federal Open Market Committee. Weekly readings on mortgage rates and new jobless claims will also be released.

Last week’s economic news included readings  from the National Association of Home Builders Housing Market Index and July readings on housing starts and building permits issued. Weekly readings on initial jobless claims and mortgage rates were also released.

NAHB: Home Builder Sentiment Remains High

According to the National Association of Home Builders, builder confidence in housing market conditions rose one point to an index reading of 66 for August. Housing Market Index readings showed that builder sentiment has held steady with readings of 64 to 66; any reading over 50 indicates positive builder sentiment.

Analysts said that despite strong readings for builder confidence in recent months, Commerce Department readings on housing starts and building permits issued did not reflect high builder confidence readings. Reports on housing starts and building permits issued fall one month behind the NAHB Housing Market Index.

Housing Starts Falter as Building Permits Increase

Commerce Department readings for July showed mixed results for housing starts and building permits issued as starts fell from June’s downwardly revised reading of 1.24 million starts to 1.19 million starts in July. Housing starts are calculated on a seasonally-adjusted annual basis.

July building permits rose from June’s reading of 1.232 million permits to 1.336 million permits issued. Analysts expected a reading of 1.287 million housing starts for July. This was the second consecutive positive reading for housing starts after a post-recession period of fewer starts.

While building permits for single-family homes traditionally outpace permits issued for multi-family housing, analysts noted that demand for multi-family housing developments is trending higher due to high prices for single-family homes.

Increasing costs for building materials, indications of  global and domestic economic uncertainty and changing consumer priorities were cited as trends impacting housing starts.

Mortgage Rates Hold Near Record Low, New Jobless Claims Rise

Freddie Mac reported little change in mortgage rates last week; the average rate for 30-year fixed rate mortgages was unchanged at 3.60 percent. Rates for 15-year fixed rate mortgages averaged 3.07 percent and were two basis points higher.

The average rate for 5/1 adjustable rate mortgages fell one basis point to 3.35 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose last week to 220,000 new claims filed as compared to the prior week’s reading of 211,000 new jobless claims filed. Analysts expected 212,000 claims to be filed last week. Nearly 6,000 new jobless claims filed in California boosted last week’s reading for new claims.

The less volatile four-week rolling report on new jobless claims rose by 1,000 claims to  213,750 new claims filed. New jobless claims hit their highest level in six weeks, but were lower than average.

Consumer sentiment concerning current economic conditions fell 6.20 points to an index reading of 92.1 according to the University of Michigan monthly survey of consumer confidence in the economy. Concerns over trade wars and the Federal Reserve’s decision to lower its target interest rate range prompted consumer confidence to slip in August.

What‘s Ahead

This week’s scheduled economic news includes readings on sales of new and previously owned homes and minutes from the last meeting of the Federal Reserve’s Federal Open Market Committee. Weekly readings on mortgage rates and new jobless claims will also be released.

Last week’s economic releases included readings on consumer credit, job openings and weekly reports on mortgage rates and first-time jobless claims.

Consumer Credit Use, Job Openings Slow in June

Consumer credit use slowed in June as credit card use lost ground. Non-revolving credit, which typically includes education and auto loans, grew at its slowest pace in three months. Mortgage loans are not included in the Federal Reserve’s report on consumer credit. Consumer credit use grew by $14.6 billion year-over-year in June as compared to May’s year-over-year reading of $16.0 billion.

Year-over-year credit use fell one percent in June to 4.30 as compared to May’s year-over-year reading of 5.30 percent. Credit card use fell by 0.10 percent in June, which suggested that consumers held off on large purchases. Fed Chair Jerome Powell said ,”households are in pretty good shape overall.” in reference to current economic conditions.

Job openings fell in June, but maintained a 15-month streak of seven million or more job openings. There were 7.35 million jobs open in June as compared to May’s reading of 7.38 million jobs open. Job openings rose in retail and real estate, but were lower in construction, leisure and hospitality categories.

Analysts said that shortages of skilled labor and fears over the effects of trade wars caused fewer hires. The trade war with China has not broken the longest period of economic growth in U.S. history, but escalation of trade disputes could further slow economic growth if trade wars aren’t resolved.

Mortgage Rates, Weekly Jobless Claims Fall

Mortgage rates dropped last week according to Freddie Mac. Rates for 30-year fixed rate mortgages averaged 3.60 percent and were 15 basis points lower. Rates for 15-year fixed rate mortgages averaged 3.05 percent and were 15 basis points lower.

The average rate for 5/1 adjustable rate mortgages dropped ten basis points to 3.36 percent. Discount points averaged 0.60 percent, 0.50 percent and 0.30 percent respectively.

Initial jobless claims fell last week to 209,000 new claims filed as compared to the prior week’s reading of 217,000  first-time claims filed. Analysts expected a reading of 215,000 new jobless claims filed for last week.

What‘s Ahead

This week’s scheduled economic news includes readings on housing market conditions, housing starts and building permits issued. Weekly readings on mortgage rates and initial jobless claims will also be released.