10
Jan
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – January 10, 2022

What's Ahead For Mortgage Rates This Week - January 10, 2022

Last week’s economic reporting included readings on construction spending and labor sector readings on jobs and unemployment. Weekly reports on mortgage rates and jobless claims were also released.

Construction Spending Unchanged, Falls Short of Expectations

The Commerce Department reported that construction spending rose by 0.4 percent in November to a seasonally-adjusted annual pace of $1.63 trillion and  9.30 percent year-over-year, Residential construction spending drove spending higher; month-to-month spending rose by 0.90 percent in November and was 16 percent higher year-over-year. Analysts expected overall construction spending to rise by 0.70 percent from October to November.

High demand for homes continued to drive residential construction spending, but spending on office construction fell by 32.10 percent year-over-year. Work-from-home options increased as employers and workers faced covid-related challenges.

Mortgage Rates Rise; Jobs Data Mixed

Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose 11basis points to 3.22 percent. The average rate for 15-year fixed-rate mortgages was 10 basis points higher at 2.43 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.41 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.50 percent.

First-time jobless claims rose by 207,000 claims filed as compared to the prior week’s reading of 200,000 initial claims filed. Analysts expected 195,000 new claim filings. Continuing jobless claims rose last week with 1.75 million ongoing claims filed; 1.72 million continuing jobless claims were filed in the prior week.

The government’s Non-Farm Payrolls report for December reported 199,000 public and private sector jobs added, which fell far short of the expected reading of 422,000 jobs added and November’s reading of 249,000 jobs added. Analysts said that the spread of the omicron variant of the covid virus slowed job searches and hiring.

ADP reported 807,000 private-sector jobs added in December, which surpassed expectations of 375,000 jobs added and November’s reading of 505,000 private-sector jobs added. The national unemployment rate fell to 3.90 percent as compared to the prior month’s reading of 4.20 percent. The unemployment rate is based on the number of unemployed workers actively seeking work and does not include workers who stopped looking for work.

What’s Ahead

This week’s scheduled economic reports include readings on inflation and retail sales and weekly reporting on mortgage rates and jobless claims.

27
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 27, 2021

What's Ahead For Mortgage Rates This Week - December 27, 2021Last week’s scheduled economic reporting included readings on sales of new and previously-owned homes along with weekly data on mortgage rates and jobless claims.

Home Sales Increase in November

Sales of new and previously-owned homes rose in November. The Commerce Department reported sales of new homes rose to 744,000 sales on a seasonally-adjusted annual basis. October sales of new homes were revised to a year-over-year reading of 662,000 new homes sold, which was the lowest reading since the worst stage of the pandemic in April 2020.  Analysts expected a year-over-year reading of 766,000 new homes sold for November. The median price of new homes sold in October reached a record high of $416,900.The number of homes for sale fell by 8.50 percent between October and November and represented a 6.50 month supply of new homes for sale.

Sales of previously-owned homes also rose in November with 6.46 million sales on a seasonally-adjusted annual basis. November’s reading fell short of the expected reading of 6.50 million sales of previously-owned homes but surpassed October’s reading of 6.34 million sales.

Rising numbers of mortgage applications indicated that demand for homes remains high, but mortgage rates are expected to rise in 2022. Given rising home prices, the additional challenge of higher mortgage rates will negatively impact affordability for some prospective home buyers.

Mortgage Rates Fall, Jobless Claims Data Mixed

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by seven basis points to 3.05 percent. Rates for 15-year fixed-rate mortgages averaged 2.30 percent and were four basis points lower than for the previous week. Rates for 5/1 adjustable rate mortgages averaged 2.37 percent and eight basis points lower. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims held steady at 205,000 new claims filed last week. Analysts expected a reading of 206,000 first-time claims filed. Continuing jobless claims fell to 1.86 million ongoing claims from the previous week’s reading of 1.87 million continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index rose to an index reading of 70.6 and exceeded the expected reading of 70.4, which matched November’s reading.

What’s Ahead

This week’s scheduled economic reporting includes S&P Case-Shiller Home Price Indices and data on pending home sales. Weekly readings on mortgage rates and jobless claims will also be released.

21
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 21, 2021

What's Ahead For Mortgage Rates This Week - December 21, 2021Last week’s economic reports included readings from the National Association of Home Builders on housing markets and the monthly post-meeting statement from Federal Reserve policymakers. Fed Chair Jerome Powell also gave a press conference. Weekly readings on mortgage rates and jobless claims were also published.

Builder Confidence in Housing Markets Rises by One Point in December

Homebuilder confidence in current national housing market conditions rose one point to an index reading of 84 in December and met analysts’ expectations. December’s reading was the highest since February. Component readings for the National Association of Home Builders Housing Market Index were lower in December. Builder confidence in current markets dropped to 90 from 92; builder confidence in housing market conditions in the next six months dropped by one point to 84 and builder confidence in buyer traffic in new housing developments fell three points to an index reading of 70.

Regional readings for builder confidence were mixed. The Northeast reported a 10 point gain in confidence from 69 to 79; the Midwestern region reported builder confidence fell by one point to 74. The South reported a two-point gain to 89 and the West posted a one-point decline in builder confidence in current housing market conditions to an index reading of 87.

Builder confidence was boosted by high demand for homes coupled with low inventories of available homes. Home prices rose rapidly in 2021, but predictions of higher mortgage rates and affordability concerns could slow the pace of buyer demand and builder confidence in 2022.

Federal Reserve Policymakers Hold Benchmark Rate Range Steady

The Federal Open Market Committee of the Federal Reserve issued its post-meeting statement and said it would hold its target interest rate range at 0.00 to 0.25 percent. The Committee committed to using its “full range of tools” to support the U.S. economy and promote the Fed’s dual mandate of achieving maximum employment and price stability. The FOMC statement indicated that economic indicators were stronger, job gains were solid and unemployment has fallen significantly.

The pandemic continues to fuel supply and demand disruptions and inflation. The Committee cautioned that emerging variants of the coronavirus could cause increased risk to the economy and it would make necessary adjustments to economic policy based on changing economic and public health conditions.

Fed Chair Jerome Powell gave a press conference after the FOMC meeting and said that inflation was expected to exceed the Fed’s target growth rate of two percent weel into next year. While wages have risen, Mr. Powell said that wage growth was not a major contributor to inflation.  Job gains averaged 378,000 jobs per month and the unemployment rate fell to 4.2 percent in November. Chair Powell said that labor force participation was negatively impacted by an aging workforce, retirements, and factors related to the pandemic including caregiving and concerns about emerging variants of the virus.

Mortgage Rates, Jobless Claims Show Mixed Readings

Freddie Mac reported mixed movement for average mortgage rates as the rate for 30-year fixed-rate mortgages rose two basis points to 3.12 percent. Rates for 15-year fixed-rate mortgages fell by four basis points on average to 2.34 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.45 percent.

Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

First-time jobless claims rose by 206,000 initial claims filed as compared to the prior week’s reading of 188,000 initial jobless claims filed. Continuing jobless claims fell to 1.85 million claims from the prior week’s reading of two million ongoing claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on sales of new and previously-owned homes, inflation, and consumer sentiment.