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What's Ahead For Mortgage Rates This Week December 29 2014 Last week’s economic news included several housing related reports. Housing markets continue to cool as November reports on existing and new home sales fell below expectations. New Jobless claims were lower than expected by 10,000 claims. The details:

Existing and New Home Sales Down, FHFA House Price Index Up

The National Association of Realtors® reported that November sales of existing homes fell to 4.93 million sales against expectations of 5.18 million sales. October’s reading was revised from 5.25 million sales to 5.26 million. This was seen as an anomaly that may have occurred during uncertainty caused by volatile stock markets. Federal Reserve Chair Janet Yellen slow housing markets to tight lending standards in a recent statement.

FHFA reported that October home prices connected with Fannie Mae and Freddie Mac mortgages increased incrementally year-over-year. October house prices increased to 4.50 percent year-over-year as compared to September’s year-over-year house price increase of 4.40 percent.

November sales of new homes fell short of expectations according to the Commerce Department. 438,000 new homes were sold as compared to expectations of 450 new home sales and September’s reading of 445,000 new homes sold. This was the slowest rate of growth in four months.

New home sales declined in three of four regions. Readings for November were -12.00 percent in the Northeast, -6.40 percent in the Southeast, -6.30 percent in the Midwest. Sales of new homes rose by 14.80 percent in the West. Analysts typically caution against reading too much into volatile month-to-month figures, but they are concerned about longer-term sales trends too. Sales of new homes were 1.60 percent lower year-over-year.

The median sale price of new homes was $280,900 in November, which was 1.40 percent higher year-over-year.

Mortgage Rates Up, New Jobless Claims Down

Mortgage rates rose across the board according to Freddie Mac’s weekly survey of average mortgage rates. The average rate for a 30-year fixed rate mortgage increased three basis points to 3.83 percent. The average rate for a 15-year mortgage rose one basis point to 3.10 percent. The average rate for a 5/1 adjustable rate mortgage was six basis points higher at 3.01 percent. Discount points were 0.60 for 30 and 15-year fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

280,000 new jobless claims were filed last week, a seven-week low. Analysts expected 290,000 new claims based on the prior week’s reading of 289,000 new claims. The four-week rolling average of new jobless claims also showed improvement with 8500 fewer claims at 290,250 new jobless claims filed. Stronger labor markets are considered good news for housing markets as more consumers can afford to buy homes.

No economic reports were scheduled Thursday or Friday due to the Christmas holiday.

What’s Ahead

This week brings Case-Shiller Home Price reports, Pending Home Sales and Construction Spending. Freddie Mac mortgage rates and Weekly Jobless Claims will be released on Wednesday due to the New Year’s Day holiday on Thursday.

What's Ahead For Mortgage Rates This Week December 22 2014

Last week’s scheduled economic events were few but informative. Housing related reports included the National Association of Home Builders/Wells Fargo Housing Market Index for December, which stayed close to a nine-year high reading of 59 in September. December’s reading was 57 and fell two points shy of the expected reading of 59. November’s reading was 58. Readings above 50 indicate that more builders are positive about market conditions than those who are not.

Housing Starts for November were lower according to the Department of Commerce’s report released Tuesday. The reading for November was 1.028 million starts on a seasonally adjusted annual basis. Analysts expected a reading of 1.035 million housing starts based on October’s level of 1.045 million starts.

Fed Confident, but Watchful of Economic Conditions

The Fed’s Federal Open Market Committee (FOMC) released its statement at the conclusion of its final meeting in 2015. Fed Chair Janet Yellen also gave a press conference that primarily supported information contained in the statement. The Fed did not foresee rising the target federal funds rate until mid to late 2015, and said that no changes were likely to be made at the first two FOMC meetings of the year. The target federal funds rate remains steady at 0.00 to 0.250 percent. FOMC members noted improvement in labor markets, but said that housing continued to recover at a slow rate. The Fed repeated its customary statement that FOMC members would monitor ongoing economic conditions and developments as part of any decision to change monetary policy. Chair Janet Yellen affirmed the committee’s position in her press conference.

Mortgage Rates, Jobless Claims Fall

Mortgage rates fell according to Freddie Mac. The average rate for a 30-year fixed rate mortgage was 3.80 percent as compared to the prior week’s reading of 3.93 percent. The average rate for a 15-year fixed rate mortgage was 3.09 percent, which was 11 basis points below the prior week’s reading. 5/1 adjustable rate mortgages had an average rate of 2.95 percent; this was three basis points lower than the previous week. Discount points remained steady at 0.50 percent with the exception of average points charged for a 15-year mortgage, which increased to 0.60 percent.

Weekly jobless claims fell to 289,000 against expectations of 295,000 new jobless claims; expectations were based on the prior week’s reading of 295,000 new claims. Analysts cautioned that weekly jobless claims readings can be particularly volatile during the holiday and early winter season.

What’s Ahead

Economic news scheduled for next week includes the National Association of Realtors® report on November sales of existing homes and November sales of new homes, which is issued by the Department of Commerce. Consumer sentiment, consumer spending and core inflation reports will also be issued next week. No economic reports will be issued Thursday or Friday due to the Christmas holiday.

What’s Ahead For Mortgage Rates This Week – December 29, 2014

What’s Ahead For Mortgage Rates This Week – December 22, 2014

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