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What’s Ahead For Mortgage Rates This Week – July 15th, 2019

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What’s Ahead For Mortgage Rates This Week – July 15th, 2019Last week’s economic releases included reports on inflation, core inflation and minutes from the Federal Open Market Committee Meeting held June 18 and 19. Weekly readings on mortgage rates and first-time jobless claims were also released.

Inflation Rate Rises, but Grows at Lowest Pace in Four Months

June’s Consumer Price Index reported the lowest rate of inflation in four months with a year-over-year rate of 1.60 percent growth as compared to May’s year-over-year inflation rate of 1.80 percent. Fuel prices were lower, which helped balance rising costs of rent, clothing and autos. Analysts said that falling inflation rates would be a primary reason why the Fed is likely to cut its key interest rate range later this month.

Core inflation, which excludes volatile food and energy sectors, rose 0.30 percent in June and surpassed expectations of 0.20 percent growth and May’s 0.10 percent growth rate.

Federal Reserve policymakers base their decisions  on the Fed’s dual mandate of maintaining maximum employment and economic growth, which is benchmarked at 2.00 percent annual inflation. FOMC members repeatedly state their commitment to reviewing domestic and global economic news and willingness to adjust Fed policy according to changing economic conditions and current events.

Mortgage Rates, New Jobless Claims

Freddie Mac  reported little change in average mortgage rates last week; Rates for 30-year fixed rate mortgages were unchanged at 3.75 percent; rates for 15-year fixed rate mortgages rose four basis points on average to 3.22 percent. The average rate for 5/1 adjustable mortgages rose one basis point to 3.40 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell by 13,000 claims to 209,000 claims filed and was lower than the expected reading of 221,000 new claims filed.  The July 4 holiday likely impacted the number of initial claims filed.

What‘s Next

This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued and a report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – July 8th, 2019

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What’s Ahead For Mortgage Rates This Week – July 8th, 2019Last week’s scheduled economic news included readings on construction spending and reports on public and private sector  jobs. Monthly readings for public and private sector jobs and the national unemployment rate were released along with weekly reports on mortgage rates and initial jobless claims.

Construction Spending Dips in May

May construction spending fell to a seasonally-adjusted annual rate of 0.80 percent growth at a pace of $1.3 trillion as compared to April’s reading, which was adjusted to 0.40 percent growth after reports of a flat reading. Year-over-year construction spending  was 2.30 percent lower in May.  

High materials costs and shortages of workers continued to dampen builder sentiment as shortages of available homes added to buyer concerns. Slower home price growth and shortages of affordable homes also impacted housing markets, but low mortgage rates encouraged qualified home buyers to lock in low rates.

Recent news reports suggest that economic growth may be slowing along with home price growth, but public and private-sector jobs grew in June after low readings in May. The Commerce Department’s Non-Farm Payrolls report showed 224,000 public and private sector jobs added in June; ADP reported 102,000 private-sector jobs added in June after May’s lean reading of 41,000 jobs added. The national unemployment rate ticked up to 3.70percent in June as compared to May’s reading of 3.60 percent.

Mortgage Rates Rise, New Jobless Claims Fall

Average mortgage rates rose last week according to Freddie Mac. Rates for a 30-year fixed rate mortgage averaged  two basis points higher at 3.78 percent. 15-year fixed mortgage rates averaged two basis points higher at 3.18 percent. The average rate for 5/1 adjustable rate mortgages rose six basis points to 3.45 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 fell to 221,000 new claims filed last week as compared to the prior week’s reading of 229,000  initial jobless claims.

What‘s Ahead

This week’s economic reports include testimony by Jerome Powell, chairman of the Federal Reserve and release of minutes of the Fed’s Federal Open Market Committee meeting held in June. Reports on inflation and weekly readings on mortgage rates and first-time jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – July 1st, 2019

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What’s Ahead For Mortgage Rates This Week – July 1st, 2019Last week’s economic reports included readings on home prices, sales of pre-owned homes and pending home sales. Weekly readings on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Index: Home Price Growth Slips in April

Case-Shiller reported slower home price growth in April; home prices were 0.20 percent lower at 3.50 percent. Increasing inventories of homes for sale provided buyers with more choices and eased demand, which increased in recent years due to severe shortages of available homes.

Cities on the west coast previously dominated home price growth, but the top three cities with highest home prices reported in April were sunbelt cities located east of high-priced west coast cities. Las Vegas, Nevada reported the highest rate of home price growth with 7.20 percent year-over-year.

Phoenix, Arizona followed with 6.00 percent growth and Tampa, Florida home prices grew by 5.60 percent year-over-year in April. Home values in all three cities were hard hit during the recession and are recovering, but not at the double digit rates seen in prior years.

New Home Sales Fall in May

Sales of newly-built homes fell to a five-month low in May according to the Commerce Department. New homes sold at a seasonally-adjusted annual rate of 626,000 homes as compared to April’s rate of 679,000 new homes sold. May’s reading was 3.70 percent lower than April’s revised reading.

There was a 6.40 month supply of new homes available at May’s sales pace. Real estate pros consider a six-month supply of available homes as average. Sales of new homes were 4.00 percent higher than for the same period in 2018. The median price of new homes sold in May was $308,000 and was 2.70 percent lower than a year ago.

Pending home sales rose in May from April’s negative reading of -1.50 percent to a positive reading of 1.10 percent. This reading lines up with the increase in homes for sale.

Mortgage Rates, New Jobless Claims

Freddie Mac reported lower mortgage rates last week with the average rate for a 30-year fixed rate mortgage 11 basis points lower than for the prior week. Average rates for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages fell nine basis points to 3.16 percent and 3.39 percent respectively.

Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Mortgage applications rose 5 percent from the prior week due to the dip in home loan rates.

Initial jobless claims rose last week to 227,000 new claims filed as compared to 216,000 new claims expected and 217,000 first-time claims filed the prior week. Analysts sad that new jobless claims remain low and that last week’s rise in claims did not reflect weakening in labor markets.

The University of Michigan Consumer Sentiment Index dropped to an index reading of 98.20 in June from May’s reading of 100. Consumer sentiment dropped due to concerns over recent tariffs and resulting increases in consumer prices

What‘s Ahead

This week’s scheduled economic news includes releases on construction spending and labor sector reports on public and private sector jobs and the national unemployment rate. Weekly reports on mortgage rates and new jobless claims will also be released.

Fed Holds Key Rate Steady As It Watches Economic Trends

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Fed Holds Key Rate Steady As It Watches Economic TrendsFederal Reserve policymakers held the federal funds rate at its current range of 2.25 to 2.50 percent. Analysts speculated that the Fed may lower its key rate based on signs of slowing economic growth and the President’s encouragement to lower the Fed rate.

Federal Open Market Committee members cited “uncertainties” in support of their decision not to change the Fed’s key lending rate. A stiff month-to-month drop in jobs growth and worries over trade problems associated with recent tariffs assessed against China contributed to the Committee’s decision to hold rates steady and closely watch domestic and global economic trends.

Signs of slowing economic growth caused the Fed to adjust its forecast for achieving the benchmark inflation rate of 2.00 percent to 2021 and lowered expectations for inflationary growth from 1.80 percent to 1.50 percent.

Fed Chair: Fed “Closely Monitoring“ Economic Developments

After the FOMC statement, Federal Reserve Chairman Jerome Powell gave a press conference in which he further addressed the Fed’s response to slowing economic growth and current developments in global affairs. Chairman Powell said that it is important for policymakers to respond based on emerging economic trends rather than reacting to quickly shifting data.

Chairman Powell identified trade concerns and slowing global economic growth as factors impacting slowing domestic economic growth. Due to recent economic changes, Chairman Powell said that a “somewhat accommodative” policy stance was indicated. Uncertainty over supply chains due to tariffs was an example of factors causing concern over economic growth. Positive indicators centered around labor as job growth continued and employers reported a shortage of workers for available jobs.

Manufacturing declined globally and domestically as service-related-jobs expanded. When asked about Fed oversight over banks’ risk exposure due to lending policies, Chairman Powell said that large institutional holdings presented the greatest risk for banks, but did not say such risk was currently problematic. The chairman re-emphasized that FOMC members constantly assess economic data and global events to determine the Fed’s economic policies.

 

What’s Ahead For Mortgage Rates This Week – June 24th, 2019

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What’s Ahead For Mortgage Rates This Week – June 24th, 2019Last week’s economic reports included monthly readings on housing market conditions, housing starts and building permits issued. Sales of pre-owned homes were released; the Federal Reserve announced its decision not to raise its key interest rate range. Weekly reports on mortgage rates and new jobless claims were also released.

NAHB: Home Builder Confidence Slips in June

The National Association of Home Builders Housing Market Index for June showed builder confidence was two points lower at an index reading of 64. Builders surveyed said ongoing concerns such as lot and labor shortages impacted their outlook, but builders were also concerned over the impact of trade wars and tariffs on the cost of building materials.

Housing starts dipped to 1.27 million starts on a seasonally-adjusted annual basis in May. April’s reading was 1.28 million starts and surpassed the expected reading of 1.23 million starts. Although housing starts were higher, they were 3 percent lower year to date than for the same period in 2018 and were 4.79 percent lower year-over-year.  Building permits issued held steady in May at 1.29 million permits issued; analysts expected a reading of 1.30 million permits issued.

Sales of pre-owned homes were higher in May with 5.34 million sales; 5.28 million sales were expected based on April’s reading of 5.21 million sales. The National Association of Realtors® said that sales of pre-owned homes were 2.50 percent higher than for April, but were 1.10 percent lower year-over-year.

Warmer weather and peak home-buying season contributed to the increase in sales. Lower mortgage rates likely compelled would-be buyers to enter the market. The Federal Reserve did not raise its target interest rate range, which stands at 2.25-2.50 percent. Lenders typically raise rates charged to consumers when the Fed raises its key rate range.

Mortgage Rates Little Changed, New Jobless Claims Fall

Freddie Mac reported little change in mortgage rates last week. 30-year fixed rate mortgages averaged 3.84 percent and rose two basis points week-to-week. Interest rates for 15-year fixed rate mortgages averaged 3.25 percent and fell one basis point on average.

The average rate for 5/1 fixed-rate mortgages was three basis points lower at 3.48 percent. 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.

First-time jobless claims fell to 216,000 claims from the prior week’s reading of 222,000 new claims filed and expectations of 220,000 initial jobless claims filed.

What‘s Ahead

This week’s scheduled economic reports include readings from Case-Shiller Indices, readings on sales of new homes, pending home sales and the consumer sentiment index. Weekly readings on mortgage rates and first-time jobless claims are also scheduled.

What’s Ahead For Mortgage Rates This Week – June 10th, 2019

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What’s Ahead For Mortgage Rates This Week – June 10th, 2019Last week’s economic releases included readings on construction spending, public and private sector jobs and national unemployment. Weekly reports on mortgage rates and first-time unemployment claims were also released.

Construction Spending Little Changed in April

Census Bureau readings for April showed a minor dip in construction spending as compared to revised figures for March. $1,295.5 billion was spent on a seasonally-adjusted annual basis and missed the expected reading of $1,314.7 billion.

March construction spending was revised to $1,299.2 billion. Falling mortgage rates were good news for home buyers, but concerns over global economic disputes and higher materials prices concerned home builders.

Mortgage Rates Fall as Initial Jobless Claims Hold Steady

Freddie Mac reported lower average mortgage rates across the board. 30-year fixed mortgage rates dropped 17 basis points to 3.82 percent; the average rate for 15-year fixed rate mortgages fell 18 basis points to 3.28 percent and the average rate for 5/1 adjustable rate mortgages fell eight basis points to 3.22 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims were unchanged with 218,000 first-time claims filed.  Monthly labor reports issued for May showed sharply lower jobs growth for public and private sector jobs.

Public and Private Sector Jobs Growth Dips in May

In a potential warning of slowing economic growth, public and private sector job creation fell far short of expected readings in May. The Labor Department’s Non-Farm Payrolls report showed 75,000 new jobs in May as compared to expectations of 180,000 new jobs and April’s reading of 224,000 public and private sector jobs created.

ADP’s report for private sector jobs growth was equally dismal for May; 27,000 jobs were created as compared to April’s revised reading of 271,000 private sector jobs created. Mark Zandi, who developed ADP jobs reporting, said “The economy is weakening; growth is slowing and slowing sharply.” The national unemployment rate was unchanged at 3.60 percent, which matched expectations. Analysts said that signs of slower economic growth could lead the Federal Reserve to implement monetary easing. 

What‘s Ahead

This week’s scheduled economic news includes readings on inflation, retail sales and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.