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What’s Ahead For Mortgage Rates This Week – May 22, 2023

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What's Ahead For Mortgage Rates This Week - May 22, 2023Last week’s economic reporting included readings on U.S. housing markets, sales of previously-owned homes, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: U.S. Home Builder Confidence Rises in May

The National Association of Home Builders reported a five-point gain in home builder confidence in current housing market conditions in May. The index reading for May rose to 50 in May as compared to April’s reading of 45. Analysts expected a reading of 45 for May. Readings above 50 indicate a majority of home builders are positive about current housing market conditions. Component readings of the home builder index also rose as the gauge for current market conditions rose by five points to 50; the reading for market conditions over the next six months rose by seven points and the index reading for buyer traffic increased by two points.

Builders surveyed indicated that homeowners aren’t motivated to sell as many of them bought or refinanced their homes during the pandemic when mortgage rates were very low. Aspiring homeowners are turning to new homes for more options as demand for homes continues to outpace the number of previously-owned homes available.

 Higher demand for homes caused developers to reduce incentives to homebuyers. Homebuilders offering price reductions on new homes fell from 30 percent in April to 27 percent in May.  NAHB said home price reductions averaged six percent of original home prices.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 6.39 percent and were four basis points higher than for the previous week. Rates for 15-year fixed-rate mortgages averaged 5.75 percent, which was unchanged from the prior week.

242,000 initial jobless claims were filed last week as compared to 255,000 expected claims and 264,000 first-time jobless claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reporting includes readings on new and pending home sales, minutes from the recent Federal Open Market Committee meeting, and the final consumer sentiment reading for May. Weekly readings on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – May 15, 2023

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What's Ahead For Mortgage Rates This Week - May 15, 2023Last week’s scheduled economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Rises in April, Slower Pace Expected in Coming Months

The  U.S. Labor Department reported the month-to-month pace of inflation rose by 0.40 percent in April and matched analysts’ expectations. April’s reading surpassed the March reading of 0.10 percent month-to-month inflationary growth. Inflation rose by 4.90 percent year-over-year in April. Analysts expect inflationary growth to continue, but at a slower pace through 2023.

Core inflation, which excludes volatile food and fuel sectors, rose at a month-to-month pace of 0.40 percent in April, which matched expectations and the March reading. Year-over-year core inflation rose by 4.90 percent in April as compared to the expected reading of 5.00 percent and the March reading of 5.00 percent.

Mortgage Rates Fall as Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by four basis points to 6.35 percent. Rates for 15-year fixed-rate mortgages averaged one basis point lower at 5.75 percent. First-time jobless claims rose with 264,000 claims filed as compared to the expected reading of 245,000 claims and the prior week’s reading of 242,000 initial jobless claims filed.

As inflation slows, rapidly rising rental rates and home prices are also expected to increase at a slower pace. As homeownership becomes more affordable, fewer families will rely on rental homes. Less demand for rentals should help with easing very high rental rates seen in many metro areas. In general, more affordable housing choices could help ease housing challenges in areas with few affordable housing options.

The preliminary consumer sentiment survey for May reflects less consumer enthusiasm for current economic conditions. The initial index reading for May is 57.7, which fell short of the expected reading of 63.0 and April’s index reading of 63.5. May’s reading was the lowest since November 2022.

What’s Ahead

This week’s scheduled economic reporting includes readings on sales of previously-owned homes, housing market conditions, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – May 1, 2023

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What's Ahead For Mortgage Rates This Week - May 1, 2023Last week’s economic reporting included readings on home prices, sales of new homes, and pending home sales. Monthly and year-over-year readings for inflation were published along with weekly reports on mortgage rates and jobless claims.

February S&P Case-Shiller Housing Market Indices show slower home price growth

National home prices continued to rise in February, but at a slower pace according to S&P Case-Shiller home price indices. Month-to-month home prices rose by  0.40 percent in February and matched analysts’ expectations, but were lower than January’s reading of  2.50 percent home price growth.

S&P Case-Shiller’s 20-city home price index, which is frequently used by real estate professionals for tracking housing markets, rose by 0.10 percent month-to-month in February.  This was the first time home prices rose in eight months.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported an increase of  0.50 percent in home prices for homes owned and sold by Fannie Mae and Freddie Mac.Properties owned and sold by Fannie Mae and Freddie Mac are subject to loan limits and underwriting rules used by the two agencies.

In related news, the National Association of  Realtors® reported pending home sales fell by -5.20 percent in March compared to the expected reading of 0.50 percent growth and February’s reading of 0.80 percent in pending sales.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported mixed movement on mortgage rates as the average rate for 30-year fixed-rate mortgages rose by four basis points to 6.43 percent. Rates for 15-year fixed-rate mortgages fell by five basis points and averaged 5.71 percent.

Initial jobless claims fell to 230,000 claims compared to the expected reading of 246,000 claims and the previous week’s reading of 245,000 claims. Continuing jobless claims fell to 1.86 million filings from the prior week’s reading of 1.87 million ongoing claims.

The University of Michigan reported no change in consumer responses to its consumer sentiment survey for April. The index reading of 63.5 for March was unchanged in April and also matched analysts’ forecasts.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending, the Federal Open Market Committee’s scheduled statement, and Fed Chair Jerome Powell’s post-meeting press conference. Readings on public and private-sector employment and national unemployment are also scheduled for release.

What’s Ahead For Mortgage Rates This Week – April 17, 2022

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What's Ahead For Mortgage Rates This Week - April 17, 2022Last week’s economic reporting included readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

March Inflation Slows as Retail Sales Fall

Inflation slowed to a month-to-month pace of 0.10 percent in March as compared to February’s reading of 0.40 percent growth. Year-over-year inflation rose by 5.00 percent and fell short of analysts’ expected reading of 5.10 percent year-over-year inflation and February’s year-over-year inflation rate of 6.00 percent.

Core inflation, which excludes volatile readings for food and fuel, rose by 0.40 percent in March and matched analysts’ expectations.  The year-over-year reading for core inflation showed 5.00 percent inflation year-over-year in March; analysts expected a year-over-year reading of 5.10 percent and February’s year-over-year reading 6.00 percent. While food and fuel costs are significant for most households, the Fed views the core reading as a more stable indicator of inflationary trends.

Retail sales fell by 1.00 percent in March; analysts expected a reading of –0.50 percent. Retail sales excluding autos fell by –0.80 percent in March. Analysts forecasted a reading of –0.40 percent for March retail sales as compared with February’s reading of 0.00 percent change in retail sales.

Mortgage Rates Fall as Jobless Claims Increase

Freddie Mac reported lower mortgage rates for the fifth consecutive week as the average rate for 30-year fixed rate mortgages fell by one basis point to 6.27 percent. Rates for 15-year fixed rate mortgages were also one basis point lower and averaged 5.54 percent.

First-time jobless claims rose to 239,000 claims filed as compared to the previous week’s reading of 228,000 claims filed and analysts’ expectations of 235,000 new claims filed. Continuing jobless claims fell to 1.81 million ongoing claims filed as compared to the previous week’s reading of 1.82 million claims.

The University of Michigan’s Consumer Sentiment Index for April showed a confidence reading of 63.5 as compared to the expected reading of 62 and the March reading of 62. Readings above 50 indicate that most consumers are confident about current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on U.S. housing markets, sales of previously owned homes, housing starts, and building permits issued. Weekly reports on mortgage rates and jobless claims will also be released.

 

What’s Ahead For Mortgage Rates This Week – April 10, 2023

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What's Ahead For Mortgage Rates This Week - April 10, 2023

Last week’s economic reporting included readings on construction spending and labor sector readings on employment and the national unemployment rate for March. Weekly readings on mortgage rates and jobless claims were also released.

Commerce Department: February Construction Spending Falls

The U.S. Commerce Department reported less construction spending in February than in January as construction spending fell by 0.10 percent to a year-over-year reading of $1.844 trillion for all types of construction. Year-over-year construction spending increased by 5.20 percent.  While total construction spending fell in February, residential construction spending increased.

Spending on single-family home construction slowed due to builders’ concerns over materials costs, supply chains, and a possible economic recession.  Seasonal weather conditions can also contribute to less construction spending during winter. Homebuilders continue to focus on high-end homes, which leaves limited options for first-time and moderate-income homebuyers. High demand for homes and increasing numbers of cash buyers are competing with owner-occupant home buyers who require mortgages to finance their homes.

High home prices and strict mortgage lending standards caused some would-be buyers to rent homes. Multi-family residential construction increased as demand for rental housing expends.

Mortgage Rates Mixed as Jobless Claims Fall

Freddie Mac reported a lower average rate for 30-year fixed-rate mortgages last week. Rates fell by four basis points to 6.28 percent. The average rate for 15-year fixed-rate mortgages rose by eight basis points to 5.64 percent. Initial jobless claims fell to 228,000 new claims filed as compared to the expected reading of 200,000 new claims filed and the previous week’s reading of 246,000 initial jobless claims filed. Continuing jobless claims were unchanged at 228,000 claims filed.

During March the U.S. unemployment rate was 3.50 percent as compared to the expected rate of 3.60 percent and February’s jobless rate of 3.60 percent.

What’s Ahead

This week’s scheduled economic reporting includes readings on inflation, minutes of the Federal Reserve’s recent Federal Open Market Committee meeting, and weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – April 3, 2023

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What's Ahead For Mortgage Rates This Week - April 3, 2023Last week’s economic reporting included readings on home prices, inflation, and pending home sales. Weekly readings on mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices Report Slower Home Price Growth in January

Home price growth cooled in January according to S&P Case-Shiller’s 20-City Home Price Index. Home prices increased by 2.50 percent year-over-year in January but rose at a slower pace than December’s reading of 4.60 percent. The FHFA Home Price Index also showed slower growth in January with year-over-year home price growth of  5.30 percent as compared to December’s home price growth rate of 6.60 percent.

The top three cities for home price growth in the 20-City Home Price Index were Miami, Florida, Tampa, Florida, and Atlanta, Georgia. In contrast, western U.S. cities posted the most declines in home prices. San Francisco, California, Seattle, Washington, and Portland, Oregon posted the steepest declines in home values in January. Home prices in western cities grew rapidly before the pandemic and are falling in post-pandemic markets.

Rapidly rising mortgage rates have narrowed the pool of qualified homebuyers and ongoing shortages of available homes are keeping home prices relatively high. As long as demand for homes exceeds available homes, it’s unlikely that housing markets will crash, but prospective buyers seem wary of recently rising mortgage rates and a slowing economy.

Mortgage Rates Fall as Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by 10 basis points to 6.32 percent. Rates for 15-year fixed-rate mortgages fell by 12 basis points and averaged 5.56 percent. Lower rates were welcome especially when some analysts expect mortgage rates to climb past eight percent in coming months.

198,000 new jobless claims were filed last week and outstripped predictions of 195,000 claims filed and the prior week’s reading of 191,000 first-time claims filed.

The final edition of the University of Michigan’s Consumer Sentiment Survey for March fell from an index reading of  67 to 62. Index readings above 50 indicate that most consumers surveyed have a positive view of current economic conditions, Current sentiment remains below an index reading of 101 recorded before the pandemic.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending, public and private-sector reports on job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.