Apr 6, 2020 | Financial Reports
Last week’s economic reporting included readings on pending home sales, Case-Shiller Home Price Indices, and Bureau of Labor Statistics reports on national unemployment. Weekly readings on mortgage rates and first-time jobless claims were also released.
Pending Home Sales Slow in February Before Coronavirus Took Hold
The National Association of Realtors® reported fewer pending home sales in February as the coronavirus gained traction. Pending sales rose by 2.40 percent in February as compared to January’s growth rate of 5.30 percent. Before the outbreak, pending home sales gained momentum in all U.S. regions.
Pending home sales are sales for which signed purchase contracts were signed, but sales were not completed. Nationally, year-over-year pending sales in February were 9.40 percent higher than in 2019. Regional pending home sales all posted higher growth; The West reported 4.60 percent growth in February.
Pending home sales rose 4.50 percent in the Midwest and 2.80 percent in the Northeast. The South posted 0.10 percent growth in pending home sales.
Pending home sales typically indicate future completed sales, but the coronavirus pandemic was expected to suppress home sales as state and local authorities implemented “shelter in place” rules and all but essential business operations shut down.
Mortgage Rates Mixed as New Jobless Claims Skyrocket
Freddie Mac reported lower fixed mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 3.33 percent and were 17 basis points lower. Mortgage rates for 15-year fixed-rate mortgages averaged 2.82 percent and were 10 basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.40 percent and were six basis points higher.
New jobless claims were unprecedented at 6.60 million first-time claims filed. Analysts expected 4 million new claims as compared to the prior week’s reading of 3.30 million initial jobless claims. The coronavirus pandemic negatively impacted job growth with the government’s Non-Farm Payrolls reporting 701,000 fewer public and private-sector jobs in March as compared to 214,000 jobs added in February.
ADP reported 27,000 fewer private-sector jobs in March as compared to 179,000 private-sector jobs added in February. The national unemployment rate rose from 3.50 percent in February to 4.40 percent in March. Analysts expect new jobless claims to rise in months ahead as the coronavirus spreads and more employers close their doors.
What’s Ahead
This week’s scheduled economic news includes readings on job openings, inflation, and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released. Please note that reporting may not appear as scheduled due to work stoppages caused by the pandemic.
Mar 30, 2020 | Financial Reports
Scheduled monthly readings were released for new home sales and consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
New Home Sales Beat Expectations in February
Sales of new homes dropped 4.40 percent in February after reaching a 13-year high in January. 765,000 new homes were sold on a seasonally-adjusted annual basis, which exceeded expectations of 750,000 sales in February. New home sales were 14.30 percent higher year-over-year.
Analysts said that further declines monthly new home sales are expected as the coronavirus spreads.
The national median price for a new home was $345,900 and there was a five-month inventory of new homes for sale in February; this was the lowest inventory of new homes since 2017.
Regional sales rose 39 percent in the Northeast and 7.00 percent in the Midwest. Sales rose 1.00 percent in the South and fell by 17 percent in the West.
Mortgage Rates Mixed After Fed Moves to Create Stability
Freddie Mac reported lower average rates for fixed-rate mortgages last week; rates for 30-year fixed-rate mortgages dropped 15 basis points to 3.50 percent. Rates for 15-year fixed-rate mortgages fell by 14 basis points to an average of 2.92 percent. The average rate for 5/1 adjustable rate mortgages rose 23 basis points to an average rate of 3.34 percent; this was caused by rising yields for 5-year treasury bills.
Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
Sharp adjustments in mortgage rates and financial markets continued last week and are likely to continue as uncertainty increases over coronavirus impacts. Analysts noted that as tenants face prolonged unemployment, landlords will also be impacted when rents aren’t paid. The stimulus payments of $1200 per adult will not cover one month’s rent for households in high-cost housing market.
First-time Jobless Claims Skyrocket as Consumer Sentiment Falls
3.28 million initial jobless claims were filed last week as compared to 282,000 claims filed the prior week. Analysts project higher numbers of jobless claims as the coronavirus spreads and more employers close their doors. Not surprisingly, consumer sentiment fell in March according to the University of Michigan’s Consumer Sentiment Index.
The March index reading dropped to 89.1 from February’s reading of 95.9. Analysts expected a March reading of 89.0.
What’s Ahead
This week’s scheduled economic news includes readings on pending home sales, Case-Shiller Home Price Indices, and labor-sector readings on job growth and national unemployment.
Mar 23, 2020 | Financial Reports
Last week’s economic reports included readings from the National Association of Home Builders on housing market conditions, Commerce Department readings on housing starts and building permits issued and National Association of Realtors® reporting on sales of previously-owned homes.
The Federal Reserve canceled the scheduled meeting of the Federal Open Market Committee and Fed Chair’s press conference, but the Fed did lower its target federal funds rate early in the week. Weekly readings on mortgage rates and initial jobless claims were also released.
Builder Confidence, Housing Starts and Building Permits Decrease
Builder confidence in housing market conditions dropped two index points to 72 in March. Readings over 50 indicate that most builders are confident about housing market conditions. Component readings of the Housing Market Index were also lower.
Builder confidence in current housing market conditions fell two points to 79; builder sentiment about housing market conditions within the next six months fell four points to 75 and builder confidence about buyer traffic in new housing developments dropped one point to 56.
NAHB Chief Economist Robert Dietz said that March readings were compiled before the coronavirus outbreak and that April’s readings would show more accurate impacts of the coronavirus on builder confidence. As state and local governments begin to restrict non-essential activity, home sales and buyer traffic readings will decline.
February housing starts fell to 1.599 million starts as compared to January’s reading of 1.624 million starts; analysts expected 1.493 million housing starts for February’s report. The Commerce Department also reported lower numbers for building permits issued. 1.464 million building permits were issued in February; analysts expected 1.500 million permits issued as compared to January’s reading of 1.550 million permits issued. Analysts expect the coronavirus to cause declines in housing starts and real estate activity in general as the virus spreads.
Mortgage Rates Rise as Fed Lowers Target Federal Funds Rate
The Federal Reserve canceled the scheduled meeting of its Federal Open Market Committee after announcing its decision to lower the target federal funds rate to 0.00 to 0.25 percent.
Freddie Mac reported higher mortgage rates last week as mortgage lenders worked through a backlog of refinancing applications. Rates for a 30-year fixed-rate mortgage averaged 3.65 percent and were 29 basis points higher. 15-year fixed-rate mortgages had an average rate of 3.06 percent, which was also 29 basis points higher than in the prior week. 5/1 adjustable-rate mortgage rates averaged 10 basis points higher at 3.11 percent.
Discount points averaged0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
First-time jobless claims jumped to 281,000 initial claims last week as employers closed and citizens were encouraged to limit non-essential activities. Unemployment claims will increase as more businesses close or reduce services.
The National Association of Realtors® reported rising sales of previously-owned homes with a seasonally adjusted annual pace of 5.77 million homes sold and was the highest reading for February sales since 2007. Home sales are expected to decrease as the coronavirus advances.
Open houses and home showings will decrease as stricter efforts to contain the coronavirus occur.
What’s Ahead
This week’s scheduled economic reports include readings on new home sales, inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.
Mar 17, 2020 | Financial Reports
Last week’s scheduled economic reports included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
Inflation Holds Steady in February
The Consumer Price Index rose 0.10 percent in February and matched January’s reading. Analysts expected no inflationary growth for February and noted that the Coronavirus had not yet impacted national inflation.
Higher rents and grocery prices caused inflation to rise in February. Year-over-year, the Consumer Price Index rose 2.30 percent in February after posting its highest reading of 2.50 percent in January; analysts expect inflation to decrease in the coming months.
The Core Consumer Price Index, which excludes volatile food and energy sectors, grew by 0.20 percent and matched expectations and January’s growth rate.
Mortgage Rates Mixed as New Jobless Claims Fall
Freddie Mac reported that the average rate for 30-year fixed-rate mortgages rose seven basis points to 3.36 percent last week after posting the lowest rate on record the prior week. The average rate for 15-year fixed-rate mortgages fell two basis points to 2.77 percent.
The average rate for 5/1 adjustable rate mortgages dropped by 17 basis points to 3.01 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
New jobless claims fell to 211,000 claims filed from the prior week’s reading of 215,000 first-time claims filed. Consumer sentiment dropped to an index reading of 95.90 in March as compared to February’s reading of 101.00; analysts expected consumer sentiment to fall to an index reading of 95.00.
The March reading was the weakest in five months and was attributed to fears of the Coronavirus. The current consumer sentiment index covered data through March 11 and index readings are expected to fall lower as impacts of the Coronavirus unfold.
What’s Ahead
This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market conditions, sales of pre-owned homes reported by the National Association of Realtors® and Commerce Department readings on housing starts and building permits issued.
The Federal Reserve will issue its post-meeting statement of its Federal Open Market Committee and Fed Chair Jerome Powell will give a press conference after the FOMC statement. Additional economic news and policy announcements related to the Coronavirus may also be released.
Mar 9, 2020 | Financial Reports
Home mortgage rates slipped to their lowest rates on record as uncertainty over the coronavirus continued to impact financial markets. Freddie Mac reported lower average mortgage rates for fixed and adjustable-rate mortgages.
Rates for 30-year fixed-rate mortgages fell by 16 basis points to 3.29 percent; the average rate for 15-year fixed-rate mortgages was also 16 basis points lower at 2.79 percent.
Mortgage rates for 5/1 adjustable-rate mortgages were two points lower on average at 3.18 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages. The 10-Year Treasury Yield, which tracks with mortgage rates, slipped to 0.90 percent last week; this was the first time the yield rate fell below one percent.
Homeowners rushed to take advantage of low mortgage rates through refinancing, but homebuyers could not gain the same benefits from record-low mortgage rates due to persistent shortages of available and affordable homes for sale. Analysts advised against waiting to refinance as home mortgage rates aren’t expected to fall much lower.
Construction Spending Rises, Fed Cuts Key Rate as National Unemployment Rate Falls
Analysts have long relied on home builders to ease chronically short supplies of homes for sale. Construction spending rose to 1.80 percent in January as compared to December’s rate of 0.20 percent. Analysts expected January’s construction spending to rise to 0.90 percent.
The Federal Reserve cut its target federal funds rate range by 0.50 percent to 1.00-1.25 percent.in a move to relieve the impact of the coronavirus outbreak on the economy. The Fed may cut its key rate by an additional 0.25 percent when the central bank’s Federal Open Market Committee holds its scheduled meeting on March 17-18th.
Labor-sector reports showed mixed results for job growth. The government’s Non-Farm Payrolls report showed 273,000 public and private-sector jobs added in February, this pace was unchanged from January. ADP reported 183,000 jobs added in February as compared to 209,000 jobs added in January.
First-time unemployment claims fell to216,000 claims filed from the prior week’s reading of 219,000 new claims filed. Analysts expected 217,000 new claims filed. The national unemployment rate dropped to 3.50 percent in February as compared to January’s reading of 3.60 percent.
What’s Ahead
This week’s scheduled economic news includes readings on inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.
Mar 2, 2020 | Financial Reports
Economic readings released last week included Case-Shiller and FHFA Home Price Indices and reports on new and pending home sales. The week wrapped up with a report on consumer sentiment and weekly readings on mortgage rates and new jobless claims.
Case-Shiller, FHFA Report Faster Home Price Growth
Home prices rose by 3.80 percent year-over-year in December according to Case-Shiller’s National Home Price Index. Case-Shiller’s 20-City Home Price Index rose by 2.90 percent year-over-year in December as compared to November’s reading of a 3.50 percent gain over-over-year; Case-Shiller reported 0.40 percent growth in home prices from month-to-month.
The 20-City Home Price Index reported no change in the top three cities for year-over-year home price growth. Phoenix, Arizona reported 6.50 percent home price growth in December followed by Charlotte, North Carolina’s reading of 5.30 percent home price growth. Tampa, Florida reported 5.20 percent year-over-year home price growth.
The Federal HousingFinance Agency reported its 34th consecutive quarter of home price growth in December. Home prices rose by 5.10 percent in the fourth quarter of 2019 and were 0.60 percent higher month-to-month.
2019 saw home buyers leave pricey coastal metro areas in favor of less expensive markets in mountain states and in the South. Home prices in these areas rose as demand increased. Overall, real estate pros reported lingering shortages of homes for sale in many areas, but low mortgage rates prompted would-be buyers to enter the market. Increased demand for homes further boosted home prices in many areas.
Mortgage Rates Fall as New Jobless Claims Rise
Freddie Mac reported lower mortgage rates last week as 30-year fixed mortgage rates dropped four basis points to 3.45 percent. The average rate for a 15-year fixed-rate mortgage was also four basis points lower at 2.95 percent. Rates for 5/1 adjustable rate mortgages averaged 3.20 percent and were five basis points lower.
Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.80 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.
First-time jobless claims rose last week; 219,000 new claims were filed and exceeded expectations of 214,000 claims and the prior week’s reading of 211,000 first-time claims filed.
New and Pending Home Sales Increase in January
764,000 new homes were sold in January on a seasonally-adjusted annual basis according to the Commerce Department. Analysts expected 722,000 new home sales based on December’s reading of 708,000 new homes sold. Low mortgage rates boosted sales as buyers turned to new home developments to take advantage of rock-bottom mortgage rates.
Pending home sales rose 5.20 percent in January as compared to a dip of -4.30 percent in December according to the National Association of Realtors®. Pending home sales were 8.70 percent higher in the South and 7.10 percent higher in the Midwest. Pending sales rose by 1.20 percent in the Northeast and fell 1.10 percent in the West.
The University of Michigan reported slight growth in consumer sentiment in February with an index reading of 101.0 as compared to January’s reading of 100.9. Analysts expected no change from January’s reading.
What’s Ahead
This week’s scheduled economic news includes readings on construction spending and labor sector reports on public and private-sector job growth and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims will also be released.
