Mortgage Rates

Last week’s economic reporting included readings from S&P Case-Shiller home price indices, data on pending home sales, and weekly readings on mortgage rates and jobless claims.

S&P Case-Shiller: December Home Price Growth Slows in 20-City Index

Home price growth slowed in December according to S&P Case-Shiller’s 20-City Home Price Index. Home prices rose by 4.60 percent year-over-year as compared to November’s year-over-year home price growth rate of 6.80 percent. The top three cities for home price growth in the 20-City Index were Miami, Florida, Tampa, Florida, and Atlanta, Georgia.

Former leading cities for home price growth have fallen to the bottom of the 20-Cities Home Price Index. Year-over-year home prices fell by -4.20 percent in San Francisco, California, and were – 1.80 percent lower in Seattle, Washington. The slowest pace of home price growth was reported in Portland, Oregon with a year-over-year home price growth rate of + 1.10 percent.

In related news, the Commerce Department reported construction spending rose by 5.70 percent year-over-year in January. Although analysts expected month-to-month construction spending to rise by 0.30 percent in January, spending fell by -0.10 percent as compared to December’s positive reading of 0.70 percent growth in month-to-month construction spending.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 15 basis points to 6.65 percent. Rates for 15-year fixed-rate mortgages rose by 13 basis points on average. Initial jobless claims fell below 200,000 first-time jobless claims for the seventh consecutive week with a reading of  190,000 first-time claims filed as compared to the expected reading of 197,000 initial claims filed and the previous week’s revised reading of 192,000 claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on job growth, national unemployment, and weekly readings on mortgage rates and jobless claims. Several Federal Reserve officials are scheduled to testify before House and Senate committees next week. Fed Chair Jerome Powell will attend and will also testify. 

Last week’s economic reporting included readings on sales of previously-owned homes, the minutes of the Federal Reserve’s most recent Federal Open Market Committee meeting, and weekly readings on average mortgage rates and jobless claims.

Federal Reserve leaders raise key interest rate range

The Federal Open Market Committee of the Federal Reserve raised the Fed’s key interest rate range by 25 basis points to 4.50 to 4.75 percent. Fed officials cautioned that failure to ease inflationary pressure by raising interest rates could lead to inflation remaining higher than the Fed’s target inflation pace of two percent per year.

In other matters,  the minutes of the Fed’s most recent Committee meeting indicated  “a number” of  Fed officers said that “a drawn-out period of  negotiations to raise the federal debt limit could pose significant risks to the financial system and the broader economy.” Failure to increase the federal debt limit could cause the government to default on its loan obligations and lead to political implications as the 2024 election year approaches.

Sales of previously-owned homes fall in January

Previously-owned homes sold at their lowest level since 2010 and declined for the twelfth consecutive month in January. This was the longest consecutive streak of monthly price declines since sales of previously-owned homes were first tracked in 1999.  Previously-owned homes sold at a year-over-year pace of 4 million sales; analysts expected an annual pace of 4.02 million sales based on December’s reading of 4.03 million sales.

New homes sold at a pace of 670,000 sales in January, but year-over-year sales were down by 19.4 percent. This was the fourth consecutive month when new home sales rose on a month-to-month basis.

Mortgage rates rise, jobless claims fall

Freddie Mac reported higher average mortgage rates as rates for 30-year fixed-rate mortgages averaged 18 basis points higher at 6.50 percent. Rates for 15-year fixed-rate mortgages averaged 5.76 percent and 25 basis points higher than for the previous week.

New jobless claims fell last week with 192,000 initial claims filed as compared to the expected reading of 197,000 first-time claims filed and the previous week’s reading of 195,000 first-time claims filed. 

Consumer sentiment rose to an index reading of 67  in February as compared to the expected reading of 66.4, which matched January’s reading. The University of Michigan’s consumer sentiment index is based on a benchmark reading of 50; readings above 50 indicate that a majority of consumers surveyed held positive views of current economic conditions.

What’s ahead

This week’s scheduled economic news includes readings from S&P Case-Shiller home price indices and data on pending home sales. Weekly readings on mortgage rates and jobless claims will also be published. 

Last week’s economic reporting included coverage of Federal Reserve Chair Jerome Powell’s speech to the Economic Club of Washington and the University of Michigan’s data on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also published.

Federal Reserve: Chairman Jerome Powell Says the “Disinflationary Process” is Ongoing

Fed Chair Jerome Powell said in remarks made to the Economic Club of Washington that the “disinflationary process” has started, but he also indicated that January’s unexpectedly strong jobs report indicated that further interest rate hikes are necessary: “We think we need to do further rate increases and we think we’ll need to hold policy at a restrictive level for a period of time.” 

Several other senior Fed officials said that further interest rate hikes would be required to keep inflation in check; as 517,000 jobs were added last week after analysts predicted declining job growth as compared to the expected reading of 187,000 jobs added. The national unemployment rate fell to a 54-year low of 3.4 percent.

Analysts cautioned that the Fed would likely continue to raise rates to control inflation but Chairman Powell said that the Fed would likely raise rates only “a couple more times.”

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week; the average rate for 30-year fixed-rate mortgages was three basis points higher at 6.12 percent. The average rate for 15-year fixed-rate mortgages rose by 11 basis points to 5.25 percent. 

Jobless claims also rose last week with 196,000 new claims filed as compared to the previous week’s reading of 183,000 initial claims filed. 1.69 million continuing jobless claims were filed as compared to the prior week’s reading of 1.65 million ongoing claims.

The University of Michigan reported that its initial consumer sentiment reading for February rose to an index reading of 66.4 as compared to the expected reading of 65.1 and last month’s index reading of 64.9. Consumer sentiment readings over 50 indicate most survey respondents were positive about current economic conditions. 

The University also released monthly readings on year-over-year inflationary predictions. February’s early reading predicts 4.2 percent year-over-year inflation as compared to January’s reading of 3.9 percent year-over-year inflation.
 

What’s Ahead

This week’s scheduled economic reports include readings on home prices, inflation, retail sales, and data on building permits issued and housing starts. Weekly readings on mortgage rates and jobless claims will also be released.

Last week’s economic reporting included readings on home price growth from S&P Case-Shiller and the Federal Housing Finance Administration. Monthly reports on job growth and unemployment were released by the federal government and ADP. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller HPI: Home Prices Drop in November

S&P Case-Shiller Home Price Indices revealed that U.S. home prices fell for the fifth consecutive month in November. The National Home Price Index fell by -3.1 percent year over year in November as compared to a positive reading of 2.8 percent home price growth in October. Miami, Florida, Tampa, Florida, and Atlanta, Georgia held the top three places in the 20-City Home Price Index. Detroit, Michigan was the only city to post a positive reading for home price growth in November’s 20-City Home Price Index.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported that prices of homes owned or financed by the two government-sponsored enterprises fell by 0.10 percent in November. Analysts expect that home prices will continue to fall in the coming months.

Mortgage Rates and Jobless Claims

Average fixed mortgage rates fell last week. Freddie Mac reported that the rate for 30-year fixed-rate mortgages fell by four basis points to 6.09 percent. Rates for 15-year fixed-rate mortgages fell by three basis points to 5.14 percent.

183,000 first-time jobless claims were filed as compared to the expected reading of 195,000 new jobless claims and the previous week’s reading of 186,000 first-time jobless claims filed. 1.66 million continuing jobless claims were filed as compared to the previous week’s reading of 1.67 million ongoing jobless claims filed.

Public and Private Sector Job Growth

The federal government’s Non-Farm payrolls report for January posted 517,000 jobs added as compared to the expected reading of 187,000 jobs added and December’s reading of 260,000 jobs added.ADP reported 106,000 private-sector jobs added in January as compared to expectations of 190,000 jobs added and December’s reading of 253,000 private-sector jobs added.

The national unemployment rate for January was 3.4 percent; analysts expected an unemployment rate of 3.6 percent and December’s unemployment rate was 3.5 percent. 

What’s Ahead

This week’s scheduled economic news includes readings on consumer sentiment, inflation, and weekly readings on mortgage rates and jobless claims.