Feb 18, 2020 | Financial Reports
Last week’s economic reporting included releases on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.
Inflation Hits Highest Growth Pace Since 2018
Consumer staples including rent, prepared food and medical expenses caused inflation to rise 0.10 percent from December to January, which was the smallest month-to-month growth in four months. Rents drove month-to-month inflation with a growth rate of 0.40 percent.
Year-over-year inflation grew from 2.30 percent to 2.50 percent, which was the highest year-over-year growth rate since Fall 2018. Analysts said that inflation remained low according to historical data and that no sharp inflationary growth was expected.
The rapid acceleration of rents and home prices continued to create obstacles for renters and homebuyers, who faced prices rising faster than the overall inflation rate and wage growth,
Retail Sales Dip in January
The Commerce Department reported an 0.30 percent drop in retail sales for January, which matched expectations, but was half the growth rate of 0.60 percent posted in December. January’s lower reading was largely attributed to clothing stores, which experienced a 3.10 percent decline in sales after the holiday season.
Analysts expected retail sales to grow at a pace fast enough to support economic growth throughout 2020.
Mortgage Rates and New Jobless Claims Rise
Freddie Mac reported higher rates for fixed-rate mortgage loans last week; rates averaged 3.47 percent for 30-year fixed-rate mortgages and were two basis points higher. Rates for 15-year fixed-rate mortgages averaged one basis point higher at 2.97percent.
Rates for 5/1 adjustable-rate mortgages rose an average of four basis points to 3.28 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.80 percent for 15-year fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.
First-time jobless claims rose to 205,000 new claims filed but fell short of an expected reading of 211,000 new claims filed. The prior week’s reading for new unemployment claims was 203,000 claims filed.
The University of Michigan reported higher consumer confidence for February; the Consumer Sentiment Index rose to 100.8 from January’s index reading of 99.8. Analysts predicted no change for February’s reading.
What’s Ahead
This week’s scheduled economic news includes readings on NAHB Housing Markets, Housing starts, building permits and sales of previously-owned homes. Weekly readings on mortgage rates and new jobless claims will also be released.
Feb 10, 2020 | Financial Reports
Last week’s economic news included readings on construction spending and public and private-sector job growth. Weekly readings on mortgage rates and first-time jobless claims were also released.
Construction Spending Dips in December
Overall spending on public and private-sector construction spending dropped by -0.20 percent in December to an annual rate of $1.33 trillion. Analysts expected spending to increase by 0.10 percent based on November’s revised reading of 0.70 percent growth in construction spending.
Spending on residential construction rose 1.04 percent in December, which is good news for housing shortages in many areas of the U.S. Lower mortgage and interest rates have fueled builder confidence as fears about the impact of tariffs on building materials were diminished.
Chronic short supplies of homes, especially affordable homes, have impacted housing markets in recent years. Builders seeking higher profits have focused on high-end construction as demand increased for entry-level and mid-range homes. Slim supplies of available homes continued to sideline buyers who couldn’t find affordable homes or homes they wanted to buy.
Bidding wars and cash buyers in high-demand markets also add additional pressure to home buyers who depend on mortgage financing. Real estate pros and industry analysts have long said the only way to ease high demand and rapidly rising home prices is for builders to produce more homes at a variety of price points.
Mortgage Rates, New Unemployment Claims Fall
Freddie Mac reported lower fixed mortgage rates for the third consecutive week as the average rate for a 30-year fixed-rate mortgage fell six basis points to 3.45 percent. Rates for 15-year fixed-rate mortgages averaged three basis points lower at 2.97 percent.
Rates for 5/1 adjustable rate mortgages averaged eight basis points higher at 3.32 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable-rate mortgages.
New unemployment claims fell to 202,000 claims filed as compared to 215,000 new claims expected and the prior week’s reading of 217,000 first-time claims filed. The month-to-month reading for first time jobless claims is considered more stable and showed 211,750 new claims filed. The lowest post-recession month-to-month reading of 193,000 new claims filed was posted in April 2019.
Public and Private-Sector Jobs Increase in January
The government’s Non-farm Payrolls report posted 225,000 new public and private-sector jobs in January as compared to December’s reading of 147,000 jobs posted. An average of 211,000 public and private-sector jobs were added in the last three months. ADP reported 291,000 private-sector jobs added in January as compared to 199,000 jobs added in December.
The Commerce Department reported a national unemployment rate of 3.60 percent in January; analysts expected the unemployment rate to hold steady at December’s reading of 3.50 percent.
What’s Ahead
This week’s scheduled economic reporting includes readings on inflation, retail sales and consumer sentiment. Weekly reports on mortgage rates ad first-time jobless claims will also be released.
Feb 3, 2020 | Financial Reports
Last week’s economic reports included readings on home prices, new and pending home sales and a statement from the Federal Reserve’s Federal Open Market Committee. The University of Michigan issued its monthly statement on consumer sentiment and weekly reports on mortgage rates and first-time jobless claims were also released.
Case-Shiller: Home Price Growth Picks Up in November
According to Case-Shiller’s National Home Price Index for November, home prices rose by 3.50 percent on a seasonally-adjusted annual basis as compared to October’s reading of 3.20 percent. Case-Shiller’s 20-City Home Price Index showed that home prices for cities included in the Index rose 2.60 percent year-over-year. All 20 cities showed growth in home prices on a month-to-month basis.
Cities with top rates of home price growth have shifted from high-cost coastal metro areas to more moderately priced areas inland and in the South. Phoenix, Arizona reported a reading of 5.90 percent growth in home prices year-over-year and has held first place in the 20-City Home Price Index for six consecutive months.
Charlotte, North Carolina held second place with a year-over-year home price gain of 5.20 percent. Tampa, Florida reported a 5.00 percent gain in home prices and held third place in the 20-City Index.
New Home Sales dipped by 3000 sales in December to a rate of 694,000 sales on a seasonally-adjusted annual basis. December sales of new homes fell short of the expected reading of 735,000 sales according to the Census Bureau and U.S. Department of Housing and Urban Development. The seasonally-adjusted inventory of 327,000 new homes available represented a 5.70 months supply of new homes based on the current sales rate.
In related news, the National Association of Realtors® reported fewer pending home sales in December; all regions reported fewer pending sales in December as compared to November. Pending sales in the Northeast were -4.00 percent lower; pending sales in the Midwestern region fell by -3.60 percent and December’spending sales in the South and West were -5.50 percent and -5.40 percent lower respectively.
The steep drop in pending home sales was attributed to slim inventories of available homes, but fewer buyers make offers on homes during the winter holiday season. Pending sales represent homes for which purchase offers have been received but not closed.
The Federal Open Market Committee of the Federal Reserve unanimously voted to hold the Fed’s benchmark interest rate at a range of 1.50 percent to 1.75 percent. Fed Chair Jerome Powell said that current domestic economic conditions were strong, but he also noted potential unrest in global economies due to factors including the outbreak of a highly contagious Asian flu virus.
Mortgage Rates and New Jobless Claims
Freddie Mac reported lower average mortgage rates last week with the rate for 30-year fixed-rate mortgages nine basis points lower at 3.51 percent. Rates for 15-year fixed-rate mortgages averaged four basis points lower at 3.00 percent; interest rates for 5/1 adjustable rate mortgages were four basis points lower at an average of 3.24 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages,
Fewer first-time jobless claims were filed last week; 216,000 new claims were filed as compared to 223,000 claims filed the prior week. The University of Michigan reported that consumer sentiment rose to an index reading of 99.80; analysts expected a reading of 99.10 based on December’s reading of 99.30.
What’s Ahead
This week’s scheduled economic reports include readings on construction spending, public and private-sector job growth and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims will also be released.
Jan 24, 2020 | Mortgage
When someone is looking to purchase a house, they need to think about how long they want their mortgage to last. While a bank can structure a mortgage to last for any number of years, the most common lengths are 15 and 30 years. While a 30-year mortgage is typically more affordable, a 15-year mortgage is cheaper overall.
When someone is trying to decide how long they want their mortgage to last, there are a few important tips to keep in mind.
The Benefits Of A 15-Year Mortgage
There are a few important benefits that everyone should know about a 15-year mortgage. Some of the biggest benefits include:
- With a 15-year mortgage, people are going to pay off their home more quickly. This will free up cash to spend in other places. Those who are looking to retire without a mortgage may want to go with a 15-year mortgage.
- Next, a 15-year mortgage is going to come with a lower interest rate. Because the bank is going to get their money back more quickly, they are going to reward the borrower with a lower interest rate. Overall, the bank is taking on less risk.
- Finally, a 15-year mortgage is also going to be cheaper overall. With a lower interest rate and a loan that is paid off more quickly, the bank is going to take less of someone’s money over the life of the loan.
The Benefits Of A 30-Year Mortgage
A 30-year mortgage has some notable differences when compared to a 15-year mortgage. There are a few important benefits that people need to remember. These include:
- The monthly payments are going to lower. Those who are planning on paying for their children’s college education, or who envision a car payment in the near future, may want to have extra cash on hand to fund them.
- As someone pays off their mortgage the interest paid on the loan is tax-deductible. Since more interest is paid on a 30-year mortgage, there will be greater tax savings as well. This means that people will get some of their money back.
- Finally, a 30-year mortgage is also more flexible. During the loan, people may elect to make extra payments. This allows someone to pay off their home more quickly.
These are a few of the most important points people need to remember when trying to decide between a 15-year and 30-year mortgage.
If you are in the market for a new home or interested in listing your current property, be sure to consult with your trusted real estate professional.
Jan 21, 2020 | Financial Reports
Last week’s economic reports included the National Association of Home Builders Housing Market Index along with readings on consumer sentiment and weekly reports on mortgage rates and new jobless claims.
NAHB: Builder Confidence d in Housing Markets Drops 1 Point in January
Homebuilder confidence in overall housing market conditions dropped one point in January, but analysts said that a new trade deal would likely benefit builder interests. The National Association of Home Builders Housing Market Index dropped to an index reading of 75 from December’s reading of 76; December’s reading was the highest since 1999.
The reading for builder confidence in January 2019 was 58; while any reading over 50 is considered positive, builder confidence increased significantly year-over-year.
Sub-index readings used to calculate the overall housing market index reading were mixed; builder confidence in current housing market conditions fell -3 points to an index reading of 81.
Homebuilder confidence in market conditions over the next six months was unchanged at a reading of 79. Homebuilder confidence in buyer traffic levels in new housing developments rose one point to 58; index readings over 50 for buyer traffic are unusual.
NAHB reported mixed readings for homebuilder sentiment regionally. Builder confidence in market conditions in the Western region rose four points; builder confidence in the Northeastern region rose three points and builder confidence readings for the South were unchanged. Builder confidence in housing market conditions in the Midwest fell seven points.
Factors contributing to high builder confidence in housing markets include high demand for homes and a potential easing of materials prices due to recent trade agreements. Builders continue to battle high materials and labor costs that reduce their profit margins. Analysts note that narrower profit margins contribute to builders’ongoing focus on building high-end homes.
Mortgage Rates Rise; New Jobless Claims Fall
Average mortgage rates rose incrementally last week; Freddie Mac reported a one basis point gain for 30-year-fixed-rate mortgages to 3.65 percent. Rates for 15-year fixed-rate mortgages averaged 3.09 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.39 percent and were nine basis points higher.
New jobless claims were lower than expected with 204,000 initial claims filed. Analysts expected 220,000 new claims and 214,000 new claims were filed the prior week. Initial jobless claims fell for the fifth consecutive week, which indicates a strong labor market.
The University of Michigan reported a lower index reading for its Consumer Sentiment Index in January. The monthly reading fell to 99.1 from December’s reading of 99.3; the projected reading for January was 99.6. The Consumer Sentiment Index reflects consumers’ attitudes toward their personal finances along with their views of overall business and buying conditions.
What’s Ahead
This week’s scheduled economic reports include sales of previously-owned homes and the Chicago Fed’sNational Index report; weekly readings on mortgage rates and new jobless claims will also be released.
