Dec 2, 2019 | Financial Reports
Last week’s economic news included readings from Case-Shiller Home Price Indices, readings on new and pending home sales and weekly readings on mortgage rates and new jobless claims. The holiday break on Thursday and Friday curtailed some economic reports.
Case-Shiller Reports Uptick in September Home Prices
Home prices rose 0.10 percent to a year-over-year growth rate of 3.20 percent in September. Rates of home price growth showed a new geographic trend with smaller cities showing higher home price growth than the coastal cities that dominated rapid home price growth in recent years. Homebuyers seeking affordable options turned inland and southward where home prices are less expensive.
Home prices in Phoenix, Arizona rose 6.00 percent year-over-year in September and claimed the top spot for home price growth in Case-Shiller’s 20-City Home Price Index. Charlotte, North Carolina held second place in home price growth with a reading of 4.60 percent year-over-year.
Tampa, Florida rounded out the top three cities with home price growth of 4.50 percent year-over-year. September’s readings indicate slowing home price growth as compared to double-digit growth rates that dominated Case-Shiller Home Price Indices in the past.
Analysts said that while low mortgage rates are helpful to home buyers, strict mortgage requirements and home price growth rates continued to outstrip inflation and wage growth.
New and Pending Home Sales Dip in October
The Commerce Department reported 733,000 sales of new homes in October; this was lower than 738,000 new homes sold in September but exceeded analysts’ forecasts for 705,000 sales. Fewer homes are sold in the fall as peak home-buying season winds down and winter holidays approach; September’s reading for new homes sold was upwardly revised from the original reading of 701,000 new homes sold.
The National Association of Realtors® reported fewer pending home sales in October with a negative reading of -1.70 percent as compared to September’s reading of +1.50 percent. Factors contributing to fewer purchase contracts signed included shortages of available homes and higher mortgage rates in October.
Pending sales are home sales for which purchase offers have been made and the sale is awaiting completion. Pending home sales are a gauge of future mortgage loan volume and completed home sales.
Mortgage Rates, New Jobless Claims
Freddie Mac reported mixed movement on average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 3.68 percent and were two basis points higher. The average rate for 15-year fixed-rate mortgages was unchanged at 3.15 percent. The average rate for 5/1 adjustable rate mortgages rose four basis points to 3.43 percent.
New jobless claims fell sharply last week from 228,0000 claims filed the prior week to 213,000 first-time claims filed last week. The dip in new jobless claims brought last week’s reading near to a post-recession low.
What’s Ahead
This week’s scheduled economic news includes readings on construction spending, public and private-sector jobs and the national unemployment rate. The monthly reading on consumer sentiment will be released along with weekly reports on mortgage rates and first-time jobless claims.
Nov 12, 2019 | Financial Reports
Last week’s scheduled economic news included the Federal Reserve’s survey of loan officers and the University of Michigan’s report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
Fed Survey of Loan Officers Finds Banks Tightened Lending Standards
The Federal Reserve’s survey of financial institutions found that lenders tightened standards for credit card and other consumer loan approval. Lending officials said that concerns over the economy drove decisions to tighten standards for new credit cards, auto loans, and personal loans.
Lenders also tightened lending requirements for new borrowers in January and March. January’s revision to lending requirements was the strictest since 2009.
Lending officials surveyed said that less tolerance for risk and concerns over new borrowers’ ability to repay loans drove decisions to tighten loan approval requirements. Growing concerns over student loan debt may have influenced lenders’ reluctance to extend credit to new borrowers.
Survey respondents said that they did not tighten requirements for residential real estate loans, but did increase restrictions on commercial real estate loans. Survey participants included 76 domestic banks and 22 foreign banks and agents of federal banks.
Mortgage Rates, New Jobless Claims Fall
Freddie Mac reported lower average mortgage rates last week after the prior week’s spike. Rates for 30-year fixed-rate mortgages fell nine basis points and averaged 3.69 percent. Rates for 15-year fixed-rate mortgages fell six basis points to an average of 3.13 percent.
The average rate for 5/1 adjustable rate mortgages fell four basis points to 3.39 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.
Initial jobless claims fell to a one-month low of 211,000 new claims filed; analysts said that last week’s reading approached a 50-year low and proved the staying power of the strongest job market in decades. In other news, the University of Michigan’s Consumer Sentiment Index rose to 95.70 in November as compared to October’s index reading of 95.50. Analysts expected consumer sentiment to fall to 95.00.
What’s Ahead
This week’s economic releases include reports on inflation and retail sales. Weekly readings on mortgage rates and initial jobless claims will also be released.
Nov 4, 2019 | Financial Reports
Last week’s economic reports included readings from Case-Shiller on home prices, pending home sales data and the post-meeting statement announcement from the Fed’s Federal Open Market Committee were released.
Labor sector reports on jobs and the national unemployment rate were also released. Weekly readings on mortgage rates and initial jobless claims were also published.
Case-Shiller: Home Price Growth Slows in August
Home price growth slowed by 0.20 percent in August for the first time since August 2018. Home price growth rates typically decrease in August as peak home-buying season passes. The Case-Shiller 20-City Home Price Index showed a geographical shift away from the West and Southwest in August as two of the three cities with the highest home price growth rates were in the Southeast.
Home prices in Phoenix, Arizona held the top spot in the 20-City Home Price Index with a seasonally-adjusted annual growth rate of 6.30 percent. Home prices in Charlotte, North Carolina and in Atlanta, Georgia rose 4.50 and 4.00 percent.
Pending home sales rose 1.50 percent in September according to the National Association of Realtors®. Pending home sales gauge future closed sales and mortgage loan volume.
Fed Lowers Key Interest Rate Range
The Federal Reserve announced its third consecutive cut to its benchmark interest rate range but indicated that future rate cuts may be on hold. Fed policymakers cut the federal funds rate range one-quarter percent to 1.50 to 1.75 percent from 1.75 percent to 2.00 percent.
Federal Open Market Committee members said global economic developments and muted inflationary pressure were considerations in the decision to lower the Fed’s key interest rate range.
Mortgage Rates, New Jobless Claims Rise
Freddie Mac reported higher mortgage rates last week; rates for a 30-year fixed-rate mortgage rose eight basis points and averaged 3.78 percent. Rates for 15-year fixed-rate mortgages rose one basis point and averaged 3.19 percent.
Rates for 5/1 adjustable-rate mortgages rose three basis points to 3.43 percent. Discount points averaged 0.50 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 0.40 percent.
First-time jobless claims rose by 5000 claims to 218,000 new claims filed. The national unemployment rate rose to 3.60 percent in October as compared to September’s reading of 3.50 percent. ADP reported 125,000 private-sector jobs added in October as compared to 93,000 jobs added in September. 128,000 public and private sector jobs were added in October according to the government’s Non-Farm Payrolls report.
What’s Ahead
This week’s scheduled economic news includes readings on job openings and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.
Oct 21, 2019 | Financial Reports
Last week’s economic reports included readings from the National Association of Home Builders on builder confidence in housing market conditions, Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and first-time jobless claims were also reported.
Builder Confidence in Housing Markets Rises
The NAHB Housing Market Index rose in October from September’s index reading of 68 to 71.Home builders were confident in market conditions due to strong demand for homes caused by low mortgage rates and slower growth in home prices.
Obstacles including tariffs on building materials did not deter builder confidence; any reading above 50 on the Housing Market Index indicates that most builders are confident about housing market conditions.
Robert Dietz, Chief Economist for NAHB, said: “The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by a gradual uptick in builder sentiment over the past few months.” Mr. Dietz cited “ongoing supply side constraints and concerns about a slowing economy” as factors expected to negatively impact builder sentiment in coming months.
The Commerce Department reported a seasonally-adjusted annual pace of 1.26 million housing starts in September. Analysts expected a pace of 1.32 million starts; August’s reading for housing starts was 1.39 million starts.
Fewer building permits were issued in September with 1.39 million permits issued as compared to August’s reading of 1.43 million permits issued; analysts expected 1.38 million building permits to be issued.
Mortgage Rates, New Jobless Claims Rise
Freddie Mac reported higher rates for fixed rate mortgages last week. The average rate for 30-year fixed rate mortgages rose 12 basis points to 3.69 percent; the average rate for 15-year fixed rate mortgages rose 10 basis points to 3.15 percent.
The average rate for 5/1 adjustable rate mortgages was unchanged at 3.15 percent. Discount points averaged 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for 15-year fixed rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.
Initial jobless claims also rose last week. 214,000 new claims were filed as compared to expectations of 215,000 claims filed and the prior week’s reading of 210,000 first-time jobless claims filed. Analysts noted that new jobless claims remained near a 50-year low.
What’s Ahead
This week’s scheduled economic news includes readings on sales of new and previously-owned homes along with a report on consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.
Oct 8, 2019 | Mortgage
The mortgage interest rate represents the cost of borrowing money to purchase a property. Mortgage interest rates are not fixed; that is, they fluctuate from one period of time to the next.
Many different factors play into what your mortgage interest rate will finally turn out to be. Some of these factors have to deal with the economy and government decisions. Other factors have to do with your personal financial situation.
Finally, mortgage interest rates can differ between lending institutions, which is why you may get different mortgage interest rate quotes from different places.
Economic Factors That Cause Mortgage Interest Rates To Fluctuate
Mortgage interest rates are somewhat connected to the stock market. When the stock market indexes go up, mortgage rates tend to rise as well. The Consumer Price Index is a measure of inflation rates. When inflation rises, you can expect to see mortgage interest rates go up, too. Other economic factors that affect mortgage interest rates include Data from the Gross Domestic Product, Consumer Confidence, and Home Sales reports.
Government Decisions That Lead To Mortgage Interest Rate Changes
The federal government keeps close tabs on the economy. Government officials are always making adjustments in order to keep the economy strong. Periodically, the government will raise or lower key interest rates in order to adjust bank lending economics. When the government raises or lowers the Federal Funds interest rate, it is always announced in the media.
Personal Financials And Your Mortgage Interest Rate
Finally, your personal financial situation influences what kind of mortgage interest rate your lender offers. A higher credit score will generally get you a lower mortgage interest rate. This is another reason why it’s always a good idea to review and improve your credit score before applying for a mortgage.
When you are ready to apply for a mortgage, meet with a trusted home mortgage professional. Because mortgage interest rates fluctuate often, you could find that the interest rate gets higher in the short time in which you’re still shopping for your home. Once you do find an attractive program for your personal situation, be sure that you are ready to take the necessary steps to lock in that rate.
If you are interested in buying a new home or listing your current property, be sure to contact your trusted real estate professional.
