02 Nov 2020
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – November 2, 2020

Financial Reports

What's Ahead For Mortgage Rates This Week - November 2, 2020Last week’s economic reporting included home price data from Case-Shiller Home Price Indices along with readings on pending home sales, new home sales, and consumer sentiment. Weekly reports on mortgage rates and jobless claims were also released.

Case-Shiller: August Home Prices Rise at Fastest Pace in Two Years

Home prices rose at a seasonally-adjusted annual pace of 5.70 percent in August according to Case-Shiller’s National Home Price Index. U.S. home prices rose by 4.80 percent in July

The Case-Shiller 20-City Home Price Index showed 5.20 percent year-over-year home price growth in August.

Phoenix, Arizona, held first place in home price growth for the 15th consecutive month. Seattle, Washington followed with 8.50 percent year-over-year growth in home prices. San Diego, California reported 7.60 percent year-over-year growth in home prices.

New and Pending Home Sales Fall in September

New homes sold at a pace of 959,000 sales on a seasonally adjusted annual basis in September.  Analysts expected a sales pace of 1.033 million sales based on August’s pace of 994,000 sales. Sales fell with the end of the peak home-buying season and may have also slowed due to rising COVID-19 cases. Demand for homes has been high as buyers’ shifting priorities were expected to cause more families to relocate to less congested suburbs. Pending home sales fell by 2.20 percent in September according to the National Association of Realtors®. Signed sales contracts were 20.50 percent higher year over year.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by one basis point to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.32 percent and were one basis point higher than for the prior week. Mortgage rates for 5/1 adjustable rate mortgages also rose by one basis point on average. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell last week to 751,000 new claims filed. Analysts expected 770,000 new claims filed based on the prior week’s reading of  791,000 new claims filed. Ongoing jobless claims also fell last week with 7.76 million ongoing claims filed as compared to the prior week’s reading of 8.47 million continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index rose to an index reading of 81.8 in October as compared to September’s reading of 80.4 and an expected index reading of 81.2.

What’s Ahead

This week’s scheduled economic reports include a statement and press conference by the Fed’s Federal Open Market Committee. Construction spending data and labor sector readings on public and private sector jobs and the national unemployment rate will also be released along with weekly readings on mortgage rates and jobless claims.

15 Jun 2020
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – June 15, 2020

Financial Reports

What's Ahead For Mortgage Rates This Week - June 15, 2020Last week’s economic reporting included readings on inflation, the post-meeting statement from the Fed’s Federal Open Market Committee, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Ticks Up in May

May’s Consumer Price Index moved from April’s reading of -0.80 percent to -0.10 percent. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose to -0.40 percent in May as compared to April’s reading of -0.40 percent. The Consumer Price Indices are used to calculate overall and core inflation rates. The Federal Reserve uses an annual inflation rate of 2.00 percent as an indicator for achieving price stabilization.

The Federal Open Market Committee of the Federal Reserve said in its post-meeting statement that the Fed would do all it can to ease the economic downturn caused by the Coronavirus and left the current federal funds rate of 0.00 to 0.25 percent unchanged. Fed Chair Jerome Powell indirectly encouraged legislators to approve funding for additional coronavirus relief.

Mortgage Rates Remain Stable as Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 3.21 percent. Rates for 15-year fixed-rate mortgages averaged 2.62 percent and were unchanged from the previous week. The average rate for 5/1 adjustable rate mortgages was also unchanged at 3.10 percent. Average discount points rose to 0.90 percent and 0.80 percent for 30-year fixed-rate mortgages and 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Jobless claims remained far higher than pre-coronavirus levels but were lower last week than for the prior week. 1.54 million first-time jobless claims were filed as compared to 1.90 million claims filed the previous week. 29.50 million continuing jobless claims were filed last week as compared to the prior week’s reading of 30.20 million continuing unemployment claims.

The University of Michigan reported a higher index reading for consumer sentiment in May with a reading of 87.8 as compared to April’s index reading of 82.3.

What’s Ahead

This week’s scheduled economic reports include the National Association of Home Builders Housing Market Index and Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and unemployment claims will also be released.

08 Jun 2020
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – June 8, 2020

Financial Reports

What's Ahead For Mortgage Rates This Week - June 8, 2020Last week’s economic news included readings on construction spending and labor reports on public and private sector jobs and the national unemployment rate. Weekly readings on mortgage rates and first-time jobless claims were also released.

Construction Spending Falls in April

The Commerce Department reported lower than expected deficits in consumer spending in April. Construction spending fell by -2.90 percent from the March reading of 0.00 percent growth in spending; analysts expected 6.80 percent less construction spending for April due to the Coronavirus pandemic.

Additional declines in construction spending are expected for May and June as impacts of the Coronavirus and uncertain economic conditions lessen demand for homes. Residential construction spending fell by 4.50 percent in May.

Mortgage Rates Mixed as  Initial Jobless Claims Fall

Freddie Mac reported higher rates for 3-year fixed-rate mortgages, which increased an average of three basis points to 3.18 percent. Rates for 15-year fixed-rate mortgages were unchanged at an average of 2.62 percent. Rates for 5/1 adjustable rate mortgages fell by three basis points to an average rate of 3.10 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable-rate mortgages.

First-time jobless claims fell last week but were much higher than readings reported before the coronavirus outbreak. States reported 1.88 million new jobless claims, which exceeded expectations of 1.81 million new claims and fell short of the prior week’s reading of 2.13 million initial jobless claims.

2.23 million initial jobless claims were filed last week including claims made under federal programs. 3.21 million total jobless claims were filed the prior week.

Jobs Reports Show Mixed Results In May

ADP reported -2.76 million private-sector jobs lost on a seasonally-adjusted annual basis as compared to April’s reading of -19.60 million jobs lost. The government’s Nonfarm Payrolls report showed 2.50 million more public and private-sector jobs than were reported in April.

Analysts expected -7.25 million fewer public and private sector jobs in May as compared to April’s reading of -20.70 million jobs lost.

The national unemployment rate dipped from April’s rate of 14.70 percent to 13.30 percent in May. Analysts expected the national unemployment rate to reach 19.00 percent in May.

Lower unemployment readings suggest that the economy is recovering at a faster pace than originally estimated, but recent civil unrest may cause another wave of coronavirus cases as protesters failed to observe social distancing protocols.

What’s Ahead

This week’s scheduled economic reports include readings on inflation and consumer sentiment. The Federal Reserve’s Federal Open Market Committee is set to meet next week, but this meeting may be canceled due to the Coronavirus pandemic.

01 Jun 2020
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – June 1, 2020

Financial Reports

What's Ahead For Mortgage Rates This Week - June 1, 2020Last week’s economic reports included monthly readings from Case-Shiller Home Price Indices, FHFA home prices, and readings on new and pending home sales. Weekly reports on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Indices: Home Price Growth Pace Increased In March

National home prices rose at a year-over-year pace of 4.50 percent in March from February’s reading of 4.20 percent. According to the Case-Shiller 20-City Home Price Index, home prices rose by 0.40 percent to a year-over-year growth rate of 3.90 percent.

The three cities reporting the highest rates of home price growth year-over-year were Phoenix, Arizona with 8.20 percent year-over-year growth; Seattle, Washington reported year-over-year home prices growth of 6.90 percent. Charlotte, North Carolina reported 5.80 percent home price growth.

Analysts said that Seattle home prices rose despite the Seattle metro area having a large outbreak of Covid-19 in the first weeks of the pandemic. April readings on home price growth are expected to dip into negative readings reflecting the spread of the coronavirus and its increasing impact.

17 of 19 cities reported in the 20-City Home Price Index for March had higher growth rates than in February; the Detroit metro area did not report data for the March 20-City Home Price Index.

The FHFA Home Price Index reported 5.90 percent year-over-year home price growth for March as compared to its February reading of 6.10 percent home price growth. FHFA reports on home sales connected with properties that have mortgages owned by Fannie Mae and Freddie Mac.

New Home Sales Increase in April as Pending Home Sales Fall

Sales of new homes rose in April although many areas were under stay-at-home orders related to the coronavirus pandemic. 623,000 new home sales were reported on a seasonally-adjusted annual basis as compared to the March reading of 619,000 sales of new homes. Pending home sales were -21.80 percent lower as compared to the March reading of -20.80 percent. Fewer pending home sales reflected impacts of the pandemic as government agencies issued stay-at-home orders and citizens faced financial uncertainty and health concerns.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week; rates for 30-year fixed-rate mortgages were nine basis points lower at an average rate of 3.13 percent. Rates for 15-year fixed-rate mortgages averaged eight basis points lower at 2.62 percent and rates for 5/1 adjustable rate mortgages averaged 3.13 percent and were four basis points lower. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points averaged 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower at 2.12 million claims filed as compared to the prior week’s reading of 2.45 million initial jobless claims filed. While fewer claims filed is good news, readings for initial jobless claims far exceeded typical numbers of new jobless claims filed before the pandemic.

What’s Ahead

This week’s scheduled economic reports include readings 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.

26 May 2020
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – May 26th, 2020

Financial Reports

What's Ahead For Mortgage Rates This Week - May 26th, 2020

Last week’s economic news included readings from the National Association of Home Builders on housing market conditions and reports on housing starts and building permits issued.

Fed Chair Jerome Powell testified before Congress about the impact of Covid-19. Weekly reports on mortgage rates and first-time jobless claims were also released.

NAHB: Home Builder Confidence Improves in May

Home-builder confidence rose seven points in May to an index reading of 37; April’s reading of 30 was the lowest reading for the NAHB Housing Market Index since June 2012. Low mortgage rates and expectations that the worst of the Covid-19 pandemic had passed contributed to higher readings for builder confidence.

Component readings in the Housing Market Index were higher in May; builder confidence in current market conditions rose six points to 42.

Builder confidence in home sales within the next six months rose ten points to 46, and the reading for buyer traffic in new housing developments rose from 13 to 21. Readings below 50 are historically common for buyer traffic, but mandatory shelter-at-home rules kept more potential buyers away.

NAHB Housing Market Index readings above 50 indicate that most builders surveyed were positive about U.S. housing markets. Readings below 50 indicate that most builders surveyed were pessimistic about housing conditions.

Fed Chair Urges Congress to Help Pandemic Victims

Fed Chair Jerome Powell testified before Congress and said that those impacted by Covide-19 should receive as much assistance as possible. While Congress approved Federal Reserve Loans to mid-to-large businesses,  Mr. Powell reminded Congress that they must also do as much as possible to help low to moderate-income families and businesses and cited a Federal Reserve study that reported 40 percent of households making less than $40,000 lost a job within the first month of the pandemic.

Sales of Pre-Owned Homes, Housing Starts, and Building Permits Issued Fall in April

The Commerce reported lower readings for sales of pre-owned homes, housing starts, and building permits issued in April. Sales of previously owned homes fell to a seasonally-adjusted annual pace of 4.33 million sales as compared to the March reading of 5.27 million sales. 

Housing  Starts fell to an annual pace of  891,000 starts in April as compared to 1.276 million starts reported in March. The Commerce Department reported 1.074 million building permits issued on an annual basis; this reading was also lower than the March reading of 1.356 million permits issued but was higher than the expected reading of 996,000 permits issued.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; the average rate for 30-year fixed-rate mortgages was four basis points lower at 3.24 percent. Rates for 15-year fixed-rate mortgages averaged 2.70 percent and were two basis points lower than for the prior week.

Rates for 5/1 adjustable rate mortgages averaged 3.17 percent and were four basis points lower. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent f04 5/1 adjustable rate mortgages.

New jobless claims reported by states fell to 2.44 million claims filed as compared to the prior week’s reading of 2.69 million initial claims filed.  The reading for state and federal jobless claims filed rose from 3.21 million to 3.30 million as applicants applied for additional jobless benefits offered through federal pandemic relief programs.

What’s Ahead

This week’s scheduled economic readings include Case-Shiller’s Home Price Indices, the FHFA Home Price Index, and data on new home sales. Monthly readings on inflation and consumer sentiment are scheduled along with weekly readings on mortgage rates and new jobless claims.