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What’s Ahead For Mortgage Rates This Week – December 23rd, 2019 Last week’s economic reports included readings from the National Association of Home Builders on housing markets; the National Association of Realtors® released data on sales of previously-owned homes and the Commerce Department released readings on housing starts and building permits issued. Weekly reports on mortgage rates and new jobless claims were also released.

NAHB: Builder Confidence Rises in December

According to the National Association of Home Builders, builder confidence in housing market conditions rose in December to an index reading of 76 as compared to November’s reading of 71. Any reading over 50 indicates that most home builders surveyed were confident about housing market conditions.

Builder confidence in current market conditions rose seven points to an index reading of 84; builder confidence in housing market conditions in the next six months rose one point to 79 and the index reading for buyer traffic in new single-family housing developments rose four points to 58. Analysts noted that the index reading for buyer traffic rarely reaches a reading of 50.

Regional readings were mixed with builder confidence in the Northeast falling two points; the Midwestern region showed builder confidence five points higher than in November and builder confidence readings in the South and West rose one point and three points respectively.

Analysts said that low mortgage rates, a slim supply of pre-owned homes for sale and low unemployment contributed to rising builder confidence. Negative factors impacting builder confidence included high land and labor costs, and a disparity between builders focusing on high-end construction while entry-level homes were most in demand.

The National Association of Realtors ®reported fewer sales of pre-owned homes in November; 5.35 million previously-owned homes sold on a seasonally-adjusted annual basis as compared to October’s reading of 5.44 million sales of previously-owned homes.

Fewer sales were caused by slim inventories of affordable homes for sale. This data supported home builders’ assertion that fewer available pre-owned homes boosted builder confidence in current housing markets.

Housing Starts, Building Permits Issued Rise in November

The Commerce Department reported 1365 million single-family housing starts in November as compared to 1.323 million starts in October. Building permits issued also rose in November with 1.482 million permits issued as compared to October’s reading of 1.461 million building permits issued. Housing Starts and building permits supply estimates for future inventories of available homes.

Mortgage Rates Unchanged, New Jobless ClaimsFall

Fixed mortgage rates were unchanged last week according to Freddie Mac. Rates for 30-year fixed-rate mortgages averaged 3.73 percent and rates for 15-year fixed-rate mortgages averaged 3.19 percent. Rates for 5/1 adjustable rate mortgages averaged one basis point higher at 3.37 percent.

New jobless claims fell to 234,000 claims filed as compared to expectations of 235,000 new claims filed and the prior week’s reading of 252,000 first-time claims filed.

What’s Ahead

This week’s scheduled economic news is limited due to the Christmas holiday. Data on new home sales will be released along with weekly readings on mortgage rates and new jobless claims.

What’s Ahead For Mortgage Rates This Week – December 16th, 2019 Last week’s economic reports included readings on inflation and retail sales; the Federal Reserve released its post-meeting statement from its Federal Open Market Committee. Weekly readings on mortgage rates and new jobless claims were also released.

Inflation, Retail Sales Rate Dip in November

The Commerce Department’s Consumer Price Index dipped in November to a growth rate of 0.20 percent as compared to October’s growth rate of 0.40 percent. Analysts expected inflation to slow to 0.20 percent growth.

Year-over-year inflation rose to 2.10 percent, which was its highest reading in a year. Analysts said rising rents, energy and healthcare costs caused the higher consumer inflation reading. November’s Core Consumer Price Index was unchanged at 0.20 percent growth. The Core CPI reading excludes volatile food and energy sectors.

Retails sales growth slowed to 0.20 percent in November as compared to October’s growth rate of 0.40 percent and expected growth of 0.50 percent. Retail sales exclusive of autos were also lower in November with a reading of 0.10 percent growth.

Analysts expected a reading of 0.40 percent growth; October’s reading for Retail Sales Excluding Autos showed 0.30 percent growth. Lower retail sales at the start of the winter holiday shopping season could signify cooling consumer confidence in the economy.

Fed Holds Steady on Key Interest Rate Range

The Federal Open Market Committee of the Federal Reserve announced no change to the target federal funds rate range at its meeting on Wednesday. The target range for the federal funds rate remained at 1.50 to 1.75 percent.

The Committee’s post-meeting statement suggested that FOMC members did not plan to change the federal funds rate in 2020 if economic conditions remain stable, but said that monetary policy decisions were flexible and could change as global and domestic economic conditions require.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average rates for fixed-rate mortgages last week. The average rate for a 30-year fixed-rate mortgage was five basis points higher at 3.73 percent; rates for 15-year fixed-rate mortgages averaged five basis points higher at 3.19 percent.

The average rate for a 5/1 adjustable-rate mortgage was three basis points lower at 3.36 percent. Discount points rose across the board last week and averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims jumped to 252,000 last week, which surpassed expectations of 220,000 new claims and the prior week’s reading of 203,000 first-time claims filed.

What’s Ahead

This week’s scheduled economic releases include the National Association of Home Builders’Housing Market Index and Commerce Department readings on housing starts and building permits issued. The National Association of Realtors® will release data on sales of pre-owned homes and weekly readings on mortgage rates and new jobless claims will also be released.

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