Nov 27, 2017 | Mortgage Rates
Last week’s economic reports included readings on pre-owned home sales, weekly reports on mortgage rates and new jobless claims and consumer sentiment. The weekly news cycle was shorter due to the Thanksgiving holidays on Thursday and Friday.
Sales of Previously–Owned Homes Jump in October
Sales of previously owned homes grew by 1.20 percent in October as compared to September’s reading of 0.10 percent growth month-to-month and indicated a seasonally adjusted annual rate of 5.48 million sales. October home sales increased as inventories of available homes declined. There was a 3.90 months supply of homes in October as compared to a 4.40 months supply of available homes in September. Real estate pros typically consider a six-month supply of homes a healthy balance between homes available and potential home buyers.
Analysts said that October’s inventory of homes for sale was the second lowest on record from 1999 to present. The National Association of Realtors®, which produces the Existing Home Sales report, said that sales to date were 4.60 percent higher year-to-date.
All regions tracked by the National Association of Realtors® reported increased sales of previously owned homes. The Northeast posted a 4.20 percent gain; the Midwest posted a gain of 0.80 percent and the South posted a gain of 1.90 percent. The West posted the highest gain in pre-owned home sales with 2.40 percent growth rate.
Analysts expect sales of pre-owned homes to rise by 3.70 percent in 2018; proposed revisions to tax laws could sideline home buyers if homeownership is “dis-incentivized” by tax reforms.
Mortgage Rates Mixed, New Jobless Claims Lower
Freddie Mac reported mixed results for average mortgage rates. The rate for 30-year fixed rate mortgages fell three basis points to 3.92 percent. Average rates for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages each rose by one basis point to 3.32 percent and 3.22 percent respectively. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.
New jobless claims were lower last week with 239,000 new claims filed. Analysts expected 240.000 new claims as compared to the prior week’s reading of 252,000 new claims.
The University of Michigan’s Consumer Sentiment Index fell from an index reading of 100.7 in October to 98.5 in November. This was the second highest reading in thirteen years. Consumer sentiment remains high despite headwinds including potential tax reform.
What‘s Ahead
This week’s scheduled economic readings include reports on new and pending home sales, Case-Shiller Home Price Indices and inflation will be released. Weekly readings on mortgage rates and new jobless claims will also be released.
Nov 20, 2017 | Mortgage Rates
Last week’s economic news included remarks by Fed Chair Janet Yellen about the diversity of opinions in the Federal Open Market Committee, readings on inflation, and the National Association of Home Builders Housing Market Index. The Commerce Department issued reports on housing starts and building permits issued; Freddie Mac and the Commerce Department issued weekly readings on mortgage rates and new jobless claims.
Fed Chair Discusses Pros and Cons of Diverse Opinions Among Policymakers
During a panel presentation of global economic leaders, outgoing Fed Chair Janet Yellen discussed the pros and cons of having 19 members on the Federal Reserve’s Federal Open Market Committee, which is responsible for the Fed’s policymaking decisions.
Chair Yellen said that it was “challenging” in terms of expressing diverse member opinions into a pat statement of Fed policy. She noted that multiple opinions on any aspect of the Fed’s decisions could be confusing for the public. She also said that individual and varied opinions were essential in considering all aspects of the Fed’s policy decisions: “The most important strength is that we avoid ‘group-think,’ which is a real pitfall for policy committees.”
NAHB: Home Builder Confidence Hits Eight–Month High
The National Association of Home Builders reported its highest housing market index reading in eight months. The monthly survey of home builders consists of readings on builder confidence in present housing market conditions, market conditions within the next six months and the volume of buyer traffic in new housing developments. Any reading over 50 indicates that more builders are confident about housing market conditions.
November’s reading of 70 was two points higher than in October; analysts expected a one-point decline to 67. Concerns over tax reforms potentially impacting homeowner tax deductions for mortgage interest were expected to impact builder confidence, but NAHB did not mention tax reform in their summation of builder confidence readings for November.
Component readings used to comprise the HMI reading were mixed. Builder sentiment increased two points to 77 for current housing market conditions. Builder confidence in market conditions over the next six months dipped by one point to 77 and builder confidence in buyer traffic in new home developments rose two points to an index reading of 50.
Builders have repeatedly cited concerns about shortages of lots and labor as well as increasing costs for building materials. NAHB said in a statement that November’s Housing Market Index reading was a “strong indicator that the housing market continues to grow steadily.”
According to the Commerce Department, October housing starts rose to 1.29 million on a seasonally-adjusted annual basis; analysts expected 1.20 million starts based on September’s reading of 1.14 million starts. 5.30 percent of housing starts were single-family construction.
Builders also took out more building permits in October; 1.30 million permits were issued against 1.23 million permits issued in September. The increased volume of building permits was partially attributed to reconstruction after hurricanes in Florida and Texas, but in the Northeast, building permits rose by 42 percent. The Northeast region is the smallest reported, but warm weather was cited as boosting permits issued.
Builder sentiment has been strong all year and was propelled by healthy job markets and lower mortgage rates.
Mortgage Rates, New Jobless Claims Rise
Fixed mortgage rates rose last week with the average rate for an average 30-year fixed rate of 3.95 percent; the average 15-year mortgage rate rose seven basis points to an average of 3.31 percent. The average rate for a 5/1 adjustable rate mortgage dipped one basis point to 3.21 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
New jobless claims rose to 249,000 last week as compared to estimates of 235,000 new claims and the prior week’s reading of 239,000 new jobless claims. Jobs lost and a backlog of first-time claims due to recent hurricanes were cited as the primary cause for the rise in new jobless claims.
What‘s Ahead
This week’s scheduled economic news includes readings on previously-owned home sales, minutes from the Fed’s last Federal Open Market Committee meeting. Weekly readings on mortgage rates and new jobless claims are also scheduled.
Nov 13, 2017 | Mortgage Rates
Last week’s economic news included a survey of senior loan officers, Freddie Mac’s average mortgage rates, and new jobless claims. An index reading for consumer sentiment was also reported.
Loan Officers: Standards for Residential Real Estate Loans Eased or Unchanged
According to the Federal Reserve’s Survey of Senior Loan Officers,72 institutions surveyed reported that all types of residential real estate loans saw easing of lending standards or no change in lending requirements. Demand for real estate loans eased, which likely influenced financial institutions decision not to tighten lending criteria for home loans. In contrast, banks surveyed indicated tighter lending requirements for auto loans and credit cards.
Mortgage Rates Fall, New Jobless Claims Rise
Freddie Mac reported lower average mortgage rates last week.30-year fixed rates averaged 3.90 percent; 15-year fixed rates averaged 3.24 percent and the average rate for a 5/1 adjustable rate mortgage rates averaged 3.22 percent. Discount points averaged 0.40 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate and 5/1 adjustable rate mortgages. Lower mortgage rates were good news for home buyers who continue to face high home prices coupled with competition by cash buyers.
First-time jobless claims increased by 10,000 new claims to 239,000 new claims. Analysts expected a reading of 231,000 new claims based on the prior week. The week-to-week reading, which can be volatile, was eclipsed by the four-week rolling average of new claims, which hit its lowest reading since March 1973.
The bump in weekly first-time jobless claims was caused by a backlog in jobless claims filed in Puerto Rico. In the aftermath of Hurricane Maria, Computer and infrastructure problems caused delays in claim filing.
Consumer sentiment dipped in November to an index reading of 97.8 as compared to an expected reading of 100.7 and October’s reading, also 100.7; Indicators of rising inflation concerned consumers, according to the University of Michigan, which conducts the survey.
What‘s Ahead
This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, housing starts, building permits issued and weekly reports on mortgage rates and new jobless claims. Monthly readings on inflation and retail sales will also be released.
Nov 6, 2017 | Mortgage Rates
Last week’s economic news included readings on Case-Shiller home prices, construction spending, and consumer sentiment. Labor sector readings on private and public employment and the national unemployment rate were also released. Weekly readings on mortgage rates and new jobless claims were also released.
Case–Shiller: Home Price Growth Approaches Record
Home price growth approached a record set in 2006 in August, but analysts said that affordability and the shortage of homes for sale could signal slower growth ahead. David M. Blitzer, Chairman of the S&P Index Committee, said that while home prices appeared to be “unstoppable,” signs of slowing momentum could signal the end of rapid home price growth.
Case-Shiller’s national home price index reported a seasonally-adjusted annual growth rate of 6.10 percent as compared to July’s corresponding reading of 5.90 percent. The 20-City Index reading was 1.80 percent short of the record set in 2006. Seattle, Washington led home price growth with a reading of 13.20 percent year-over-year. Las Vegas, Nevada held second place with a seasonally-adjusted annual growth rate of 8.60 percent and San Diego, California held third place in the 20-City Index with a reading of 7.80 percent.
While the West continued to post highest home price gains, some home price gains are leveling out. San Francisco, California, which posted double digit home price growth in recent years, posted 6.10 percent growth year-over-year and a negative reading of -0.10 percent in August as compared to July.
September construction spending rose due to public works projects and housing construction. This was good news as a shortage of available homes has daunted real estate sales in past months. Building more homes is the only solution to the ongoing shortage of homes for sale. Construction spending 4ose0.30 percent in September as compared to an expected reading of no change, which was based on August’s reading of 0.10 percent.
Mortgage Rates Little Changed, New Jobless Claims Fall
Freddie Mac reported no change in the average rate of 3.94 percent. Average rates for a 15-year mortgage and a 5/1 adjustable rate mortgage were each two basis points higher at 3.27 percent and 3.23 percent respectively. Average discount points were 0.50 percent for all three mortgage types. The President is expected to announce the appointment of a new Federal Reserve Chair this week, which could impact interest rates either way.
First-time jobless claims were lower last week with 229,000 claims filed as compared to expectations of 235,000 new claims filed and the prior week’s reading of 234,000 new jobless claims. Private-sector employment grew by 235,000 jobs in October as compared to September’s reading of 110,000 new private-sector jobs.
The Commerce Department reported 261,000 new public and private-sector jobs in October. Analysts expected 325,000 new jobs, but September’s reading was adjusted to 18,000 new public and private sector jobs added. The national unemployment rate dipped to 4.10 percent as compared to an expected reading of 4.10 percent and September’s reading of 4.20 percent.
Consumer confidence grew to an index reading of 125.9 in October as compared to analysts’ expected reading of 121.3 and the prior month’s reading of 119.5.
Oct 30, 2017 | Mortgage Rates
Last week’s economic news included readings on new and pending home sales and weekly reports on mortgage rates and new jobless claims.
New Home Sales Exceed Expectations; No Growth for Pending Sales
September sales of new homes reached a 10-year high with a seasonally-adjusted annual rate of 667,000 new homes sold. Analysts said that high demand drove September sales past the expected rate of 555,000 sales and August’s reading of 561,000 sales of new homes. September’s reading was 19.9 percent higher than for August and was 17 percent higher year-over-year. September’s reading was 8.60 percent higher for year-to-date sales of new homes. This news may encourage builders to ramp up new home construction, but the widespread damage caused by hurricanes and fires will account for rebuilding thousands of previously-owned homes in the coming months.
The national average price for a new home was $319,700 as compared to $314,700 year-over-year. Real estate professionals said that it would take five months to sell all new homes currently available.
Pending home sales did not change from August to September. The Commerce Department reported no change from August’s reading of – 2.80 percent. Low inventories of pre-owned homes and affordability concerns may have sidelined would-be buyers as competition for available homes and home prices rose.
Regional results for pending sales were mixed. The Northeast region reported 1.20 percent growth in pending home sales, while the Midwest reported 1.40 percent growth and the West topped regional pending sales rates with 1.90 percent growth. The Southern region posted -2.30 percent fewer pending sales; hurricanes likely accounted for fewer contracts signed in September. Year-over-year pending home sales were lower in all regions.
Weekly Mortgage Rates, New Jobless Claims Rise
Mortgage rates rose across the board last week. Freddie Mac reported that averaged rates for a fixed rate mortgage rose by six basis points for 30-year and 15-year mortgages. The average rate for a 30-year fixed rate mortgage was 3.94 percent; the average rate for a 15-year fixed rate mortgage was 3.25 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
New jobless claims rose to 233,000 claims, which matched expectations and exceed the prior week’s reading of 223,000 first time claims, which was a 44-year low. The jump in first-time claims is not due to layoffs as employers report shortages of skilled candidates to fill job openings.
What‘s Ahead
This week’s scheduled economic news includes readings on Case-Shiller home prices, construction spending and labor sector readings on private and public-sector employment. The national unemployment rate will be released along with weekly readings on mortgage rates and new jobless claims.
Oct 16, 2017 | Mortgage Rates
Last week’s economic reports included minutes of the Fed’s Federal Open Market Committee meeting held in September along with releases on inflation and weekly reports on mortgage rates and new jobless claims.
FOMC Meeting Minutes Indicate December Rate Hike is No Sure Thing
According to minutes for the September 19 and 20 meeting of the Federal Reserve’s Federal Open Market Committee, the Fed has adopted a wait-and-see posture concerning a possible rate hike at December’s meeting. Although analysts previously indicated that additional rate hikes were expected by the end of 2017, the Fed chose not to raise the federal funds rate in September.
Hurricanes Harvey and Irma Impact Industrial Production
Hurricane damage was expected to slow industrial production in the short term. The impact of hurricane damage in Texas and Fl0rdia are expected to be short term, but the full impact of the two hurricanes had not been fully assessed at the time of the FOMC meeting.
Labor and real GDP readings rose, but the year-over-year reading for inflation was lower than the two percent inflation rate set by the Fed as a positive economic indicator. The Fed’s dual mandate also includes achieving maximum employment as measured by the national unemployment rate. The Fed originally set a goal of 6.50 percent unemployment in the immediate aftermath of the recession, but the national unemployment rate has exceeded expectations and currently hovers near 4.30 percent. Strong labor markets help propel renters into housing markets as they have more confidence in maintaining long-term employment.
Mortgage Rates, New Jobless Claims
Mortgage rates rose last week. Freddie Mac reported an average rate of 3.91 percent, which was six basis points higher than for the previous week. Rates for a fifteen-year fixed rate mortgage also rose by six basis points to 3.21 percent. The average rate for a 5/1 adjustable rate mortgage dipped two basis points to 3.16 percent. Discount points averaged 0.50 percent for fixed rates and 0.40 percent for a 5/1 adjustable rate mortgage.
New jobless claims fell to 243,000 as compared to expectations of 258,000 claims and the prior week’s reading of 260,000 first-time jobless claims filed.
What‘s Ahead
This week’s scheduled economic readings include the National Association of Home Builders Housing Market Index, Commerce Department reports on housing starts and building permits issued. Weekly readings on mortgage rates and new unemployment claims will also be released.
