28
Sep
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – September 28, 2015

Whats Ahead For Mortgage Rates This Week September 28 2015Last week’s scheduled economic news included reports on new and existing home sales, the FHFA House Price Index, weekly reports on mortgage rates, and new jobless claims. The week finished with a report on consumer sentiment.

Existing Home Sales Fall as New Homes Sales and Home Prices Rise

The National Association of Realtors reported that home sales for pre-owned homes fell in August. Analysts expected sales of existing homes to reach a reading of 5.52 million sales on an annual basis, but the actual reading was 5.31 million existing homes sold as compared to July’s reading of 5.58 million pre-owned homes sold. Rising home prices were cited as a primary reason for the drop in sales.

FHFA’s House Price Index for July reflected the trend of rising home prices; July’s reading was 0.60 percent as compared to June’s reading of a 0.20 percent increase in home prices associated with homes with mortgages owned by Fannie Mae or Freddie Mac.

Sales of newly built homes reached the highest level since early 2008 in August, evidence that demand for housing is strengthening heading into the fall. Home builder sentiment is at its highest level in nearly a decade according to a survey earlier this month from the National Association of Home Builders

Mortgage Rates Fall

Freddie Mac reported that average mortgage rates fell on Thursday; the rate for a 30-year fixed rate mortgage was 3.86 percent; the average rate for a 15-year mortgage was 3.08 percent and the rate for a 5/1 adjustable rate mortgage  dropped by one basis point to 2.91 percent. Discount points were 0.70, 0.60 and 0.50 percent respectively.

Jobless Claims Also Rise As Consumer Sentiment Fell.

The number of Americans seeking unemployment benefits rose slightly last week yet remained at a low level consistent with solid job growth. The Labor Department says weekly applications for jobless aid rose 3,000 to a seasonally adjusted 267,000. The four-week average fell to a 15-year low last month.

The University of Michigan says consumers lost confidence for the third straight month in September, worried about bad news about the global economy. Consumer sentiment index fell to 87.2 this month, lowest since October 2014 and down from 91.9 in August. Richard Curtin, Chief Economist for the survey, said consumers are worried about signs of weakness in the Chinese economy and continued stresses on Europe’s economies.

What’s Ahead

This week’s economic reports include Pending Home Sales, the Case-Shiller Home Price Index, Core Inflation, ADP Employment and the government’s Non- farm Payrolls report. The national unemployment rate and Consumer Confidence Index for September are also slated for release this week.

30
Mar
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – March 30, 2015

Whats Ahead For Mortgage Rates This Week March 30 2015Last week’s economic reports included reports on new and existing home sales and FHFA’s monthly home price index for properties associated with Fannie Mae and Freddie Mac mortgages. The details:

New Home Sales Surge, Existing Home Sales Drop 

According to the Department of Commerce, new home sales rose in January to a seasonally-adjusted annual rate of 539,000 which exceeded the expected rate of 455,000 sales and the revised figure of 500,000 sales of new homes in December 2014. This was a 7.80 percent increase over December’s figure and was the first time since 2008 that new home sales met or exceeded the benchmark of 500,000 sales for two consecutive months.

Sales of new homes were close to 25 percent higher than for January 2015, and analysts said that more jobs and relatively low mortgage rates could boost the traditionally busy spring and summer home buying season.

The National Association of Realtors® reported that sales of previously owned homes rose by 1.20 percent in February to a seasonally-adjusted annual rate of 4.88 million sales against expectations of 4.94 million sales of previously owned homes. Extreme winter weather was cited as a cause for the decline in sales.

Lawrence Yun, chief economist for the National Association of Realtors® said that the average price for pre-owned homes rose to $202,600, which represents a 7.50 percent increase year-over-year. Wages are rising at an average of 2.00 percent annually and rents are rising at an average of 3.50 percent annually. This is creating affordability issues for renters and would-be homebuyers as their incomes are not keeping pace with escalating housing and rental prices. The share of first-time home buyers rose by 1.00 percent in February, but analysts said that historically the market share for first-time buyers averages about 40.00 percent. 

FHFA: Home Price Index Falls by 0.30 Percent

The Federal Housing Finance Agency (FHFA) reported that home prices for sales of homes associated with Fannie Mae and Freddie Mac mortgages fell by 0.30 percent year-over-year in January to an increase of 5.10 percent year-over-year as compared to January 2014’year-over-year increase of 5.40 percent.

Mortgage Rates, Weekly Jobless Claims Fall

Mortgage rates fell last week. Freddie Mac reported average rates for fixed rate mortgages fell by none basis points with the rate for a 30-year fixed rate mortgage averaging 3.69 percent and the rate for a 15-year fixed rate mortgage averaging 2.97 percent. Discount points for fixed rate mortgages were unchanged at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage dropped by five basis points to an average of 2.92 percent. Discount points also fell from 0.50 percent to 0.40 percent.

Weekly jobless claims fell to 282,000 new claims against an expected reading of 290,000 new claims and the previous week’s reading of 291,000 new jobless claims. This reading supports reports of expanding labor markets that may give would-be home buyers the confidence to buy homes.

What’s Ahead

This week’s scheduled economic news includes the Case-Shiller Home Price Index, Pending Home Sales, Non-Farm Payrolls and the National Unemployment Rate along with regularly scheduled releases on mortgage rates and weekly jobless claims.

26
Aug
By support
Housing Market

DOC New Home Sales and NAR Existing Home Sales

DOC New Home Sales and NAR Existing Home SalesThe Department of Commerce reported July sales of new homes dropped by 2.40 percent over June to a four month low. Analysts noted that although July’s reading of 412,000 new homes sold fell short of expectations and June’s reading, the new homes sector is volatile and subject to change.

June’s reading of 406,000 new homes sold was revised to 422,000 new homes sold; expectations were based on the original reading. Three of four regions posted a slower rate of growth for home prices with only the South posting a gain.

The average price of a new home in the U.S. rose to $269,800, which is 2.90 percent higher than June’s average home price. Inventories of new homes increased to a six-month level based on current sales pace.

This was the highest inventory of new homes available since 2011. Strict mortgage credit requirements and an elevated national unemployment rate contributed to the lower rate of home value appreciation and higher inventories of new homes.

The good news: New home sales increased by 12.90 percent year-over-year in July.

Existing Home Sales Rise: Steady Mortgage Rates, Rising Rents Cited

The National Association of REALTORS® reported that July sales of previously-owned homes rose from June’s revised figure of 5.03 million sales to 5.15 million sales and achieved the highest reading for 2014.

The existing home sales readings are calculated on a seasonally adjusted annual basis. Existing home sales were 4.30 percent lower than for July 2013, which had the highest reading for existing home sales in 2013.

Lawrence Yun, chief economist for the NAR, said that a growing inventory of available pre-owned homes for sale and strengthening labor markets contributed to sales growth. Mr. Yun said that July’s pace of sales was expected to continue based on mortgage rates holding steady and rising rents for apartments.

The inevitable rise of mortgage rates and increasing home prices were cited as factors that could cool existing home sales in coming months. With the Fed scheduled to complete its asset purchase program in October and changes to the Fed’s target federal funds rate expected within months, mortgage rates are expected to rise. Affordability looms as an obstacle to sales; home prices continue to rise as wages grow at a slower pace than home prices.

The national median price for existing homes was $222,900, which was a year-over-year increase of 4.90 percent. This was the 29th consecutive month for year-over-year price gains for existing homes. The inventory of existing homes for sale increased by 3.50 percent to 2.37 million available homes and represents a 5.50 month supply. Unsold inventory of existing homes is 5.80 percent higher year-over-year. As compared to July 2013’s reading of 2.24 million available pre-owned homes.

Homes sold through foreclosure or short sales have steeply declined from 36 percent of existing home sales in 2009 to approximately 9 percent in July and were down from 15 percent of existing home sales in June.