20
Jul
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 20, 2020

What's Ahead For Mortgage Rates This Week - July 20, 2020Last week’s economic reports included readings from the National Association of  Home Builders on housing markets along with Commerce Department data on housing starts and building permits issued. Weekly reports on mortgage rates and unemployment claims were also released.

NAHB: Builder Confidence in Housing Markets Increases in July

Homebuilders gained confidence in housing market conditions as home buyers sought homes in less-congested suburban areas. Builder confidence rose 14 points to an index reading of 72 in July. NAHB Chair Chuck Fowke said, “Builders are seeing strong traffic and lots of interest in new construction as existing home inventory remains lean.”

Homebuyers sought larger homes to accommodate work-at-home needs and also fled from urban congestion posing hazards due to Covid-19. Robert Dietz, chief economist for NAHB said, “Flight to the suburbs is real.” This trend benefits home builders, who must meet buyer demand.

Inventories of pre-owned homes remained low and improved builder outlook on current sales of single-family homes by 16 points to an index reading of 79.

Builder confidence in market conditions for the next six months rose seven points to 75 and builder confidence in buyer traffic rose 15 points to 58. Index readings over 50 indicate positive market conditions.

Commerce Department readings for June housing starts and building permits issued were higher than in May. 1.19 million housing starts were reported on a seasonally adjusted annual basis as compared to May’s reading of 1.01 million housing starts. 1.24 million building permits were issued in June on a seasonally adjusted annual basis as compared to May’s reading of 1.22 million permits issued.

Mortgage Rates, Jobless Claims

Freddie Mac reported the lowest mortgage rates in 50 years last week;  the average rate for 30-year fixed-rate mortgages fell five basis points to 2.98 percent. Rates for 15-year fixed-rate mortgages fell three basis points to 2.48 percent; rates for 5/1 adjustable rate mortgages rose four basis points to 3.06 percent on average Analysts said that as low mortgage rates encouraged would-be buyers to enter the market, increasing cases of COVID-19 in some areas could cause markets to cool as fears of layoffs and unemployment impact real estate markets.

New and continuing jobless claims fell last week but remained much higher than pre-COVID-19 readings. 1.30 million initial jobless claims were filed as compared to the prior week’s reading of 1.31 million new claims. Continuing jobless claims fell to 17.30 million claims as compared to the previous weekly reading of 18.10 million ongoing jobless claims.

What’s Ahead

Readings on sales of new and previously-owned homes will be released along with weekly reports on mortgage rates and unemployment claims.

13
Jul
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 13, 2020

What's Ahead For Mortgage Rates This Week - July 13, 2020Last week’s scheduled economic news included readings on consumer credit, job openings, jobless claims, and mortgage rates.

Consumer Borrowing Declined at Slower Pace in May

According to Federal Reserve data, consumer borrowing fell at a slower annual pace of -5.30 percent in May as compared to April’s reading of -20 percent. Non-revolving consumer credit, which includes vehicle and student loans, increased by 2.30 percent in May. The Federal Reserve does not report on real estate loans.

Federal assistance programs including the first round of stimulus checks, additional unemployment payments and support for businesses contributed to better readings for the economy in May, but last week’s rising coronavirus cases may cause all or part of economic gains to be lost as local governments reverse decisions to reopen businesses and local government services.

Job Openings Rise  in May as Weekly Jobless Claims Fall

The Bureau of Labor Statistics reported 5.40 million job openings in May as compared to April’s 5.00 million job openings. Rising job openings coincided with reopening business and government services as state and local authorities eased stay-at-home requirements and began easing restrictions on economic activity.

Weekly jobless claims were also lower than for the preceding week. 1.31 million initial jobless claims were filed last week as compared to the prior week’s reading of 1.41 million first-time claims filed. Ongoing jobless claims fell to 18.10 million claims from the prior week’s reading of 18.80 million continuing jobless claims. Jobless claims remained much higher than pre-pandemic readings.

Mortgage Rates Drop to Record Lows

Freddie Mac reported the lowest recorded average mortgage rates as rates for fixed-rate mortgages dropped by four basis points to 3.03 percent for 30-year fixed-rate mortgages and fell by five basis points to 2.51 percent for 15-year fixed-rate mortgages. The average rate for 5/1 adjustable rate mortgages rose two basis points to 3.02 percent; discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The U.S. Senate is expected to work on its version of the next Coronavirus relief package next week; it should be completed by the end of July or in early August.

What’s Ahead

This week’s scheduled economic news includes reports on housing markets, housing starts, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.

 

06
Jul
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 6, 2020

What's Ahead For Mortgage Rates This Week - July 6, 2020Last week’s scheduled economic reports included readings on pending home sales, Case-Shiller Home Price Indices, and labor sector reports on private and public-sector job growth. Data on construction spending was also released. Weekly readings on mortgage rates and jobless claims were also released.

Pending Home Sales Jump in May

Sales of homes for which purchase contracts were signed rose by 44.30 percent in May and was the highest month-to-month increase recorded since the report’s inception in 2001..Pending home sales are sales with signed purchase contracts but aren’t closed.

Lawrence Yun, chief economist for the National Association of Realtors® said,  “This has been a spectacular bounce-back and also speaks to how the housing sector could lead the way for a broader economic recovery.” This positive news could be dampened by rising infection rates for the Covid-19 outbreak as some states reversed decisions to re-open additional parts of their economies.

Case-Shiller: Home Price Growth Rises in April

The Case-Shiller National Home Price Index reported that home prices grew by 0.10 percent to 4.70 percent on a seasonally-adjusted annual basis. This reading lagged behind the worst part of the Covid-19 outbreak and analysts cautioned that home price growth would fall in the future. The Case-Shiller 20-City Index reported the top three cities for home price growth were Phoenix, Arizona, Seattle, Washington, and Minneapolis Minnesota. The geographical disparity between these cities differs from recent years when coastal cities dominated home price growth rates.

In related news, the Commerce Department reported improvement in construction spending in May. Construction spending fell -2.20 percent in May as compared to -3.50 percent in April.

 Mortgage Rates Hit All-Time Low; Jobless Claims Ease

Freddie Mac reported the lowest mortgage rates reported since the inception of their Primary Mortgage Market Survey. Rates for 30-year fixed-rate mortgages averaged 3.07 percent and were eight basis points lower. Rates for 15-year mortgages dropped by three basis points on average to 2.56 percent. Rates for 5/1 adjustable-rate mortgages dropped by eight basis points on average to 3.00 percent.

Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. 

New jobless claims fell to 1.43 million claims filed from the prior week’s reading of 1.48 million initial claims filed. Ongoing jobless claims rose from 19.20 million claims to 19.30 million continuing jobless claims.filed. New and continuing jobless claims were far above pre-coronavirus levels.

Job Growth Reports Mixed as Unemployment Rate Falls

ADP reported 2.37  million private-sector jobs added in June as compared to May’s reading of 3.07 million private sector jobs added. The federal government’s Non-Farm Payrolls report showed 4.80 million public and private sector jobs added in June as compared to 2.70 million public and private sector jobs added in May.

What’s Ahead

This week’s scheduled economic reports include readings on job openings and weekly reports on mortgage rates and jobless claims.