Last week’s economic reporting included readings from the Federal Reserve’s Federal Open Market Committee and a speech given by Fed Chair Jerome Powell. Weekly reports on mortgage rates and jobless claims were also released.
FOMC Minutes: Fed’s Monetary Policy Stance to Remain “Accommodative”
The Federal Open Market Committee of the Federal Reserve released minutes of its meeting held March 16 and 17. The meeting minutes indicated split opinions on the U.S. economy’s outlook. Several members expected inflation to rise due to constricted supply chains and high demand for goods and services. This scenario resembles trends in residential real estate where supplies of available homes are far lower than buyer demand. Other FOMC members expected continued downward pressure on inflation. Members expected inflation to rise to 2.40 percent in 2022 but expected the inflation rate to ease to 2.10 percent by 2023.
The Federal Reserve has a dual legal mandate to achieve an inflation rate of 2.00 percent and maximum employment. While inflation is expected to exceed 2.00 percent in 2022 and beyond, unemployment remains above pre-pandemic levels. FOMC members did not raise the Fed’s key interest rate range from 0.00 to 0.25 percent.
In related news, Fed Chair Jerome Powell spoke at a webinar hosted by the International Monetary Fund. He emphasized the potential threat of COVID to the U.S. and global economy and encouraged everyone to get vaccinate and said, “Until the world is vaccinated, we’re all going to be at risk of new mutations and we won’t be able to resume activity all around the world.”
Mortgage Rates, Jobless Claims Show Mixed Readings
Fixed mortgage rates were lower last week according to Freddie Mac. The average rate for 30-year fixed-rate mortgages fell by five basis points to 3.13 percent; the average rate for 15-year fixed-rate mortgages fell by three basis points to 2.42 percent. Rates for 5/1 adjustable rate mortgages averaged 2.92 percent and rose by eight basis points. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points averaged 0.10 percent for 5/1 adjustable rate mortgages.
Initial jobless claims rose to 744,000 claims filed as compared to the prior week’s reading of 728,000 first-time jobless claims filed. Analysts expected 694,000 new claims for last week. Continuing jobless claims were lower last week with 3.73 million ongoing claims filed. There were 3.75 million continuing jobless claims in the prior week.
What’s Ahead
This week’s economic reporting includes readings from the National Association of Home Builders, Commerce Department readings on housing starts and building permits issued, and inflation. Weekly readings on mortgage rates and jobless claims will also be released.
Last week’s economic reports included readings from the National Association of Home Builders on housing markets and Commerce Department data on housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims were also released.
NAHB: Builder Confidence Slips as Materials Costs Rise
The National Association of Home Builders reported that its Housing Market Index fell to an index reading of 82 in March as compared to February’s index reading of 84. Analysts forecasted a reading of 83. Builder concerns included rising materials costs and mortgage rates, which impact home pricing and affordability. Robert Dietz, Chief Economist for NAHB, said that lumber prices have more than doubled since August 2020 and have added $24,000 to the cost of a home on average.
Regionally, builder confidence in housing markets declined in the Midwest, Northeast, and West but remained unchanged in the South.
Demand for new homes remained high as shortages of existing homes for sale persisted. Homebuilder sentiment was unchanged in the South but declined in the Northeast, Midwest, and Western regions of the U.S.
According to Commerce Department reports for February, housing starts declined to 1.42 million starts n a seasonally-adjusted annual basis as compared to January’s reading of 1.58 million housing starts. Building permits issued also reflected growing builder concerns as permits issued fell to 1.68 million permits issued from 1.89 million building permits issued in January.
Mortgage Rates Rise, Jobless Claims Mixed
Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages rose by four basis points to 3.09 percent; the average rate for 15-year fixed-rate mortgages rose by two basis points to 2.40 percent. Mortgage rates for 5/1 adjustable rate mortgages averaged 2.79 percent and rose by two basis points.
Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
770,000 first-time jobless claims were filed last week as compared to the prior week’s reading of 725,000 new jobless claims filed. Severe winter weather in Texas boosted new claims, which significantly exceeded analysts’ expectations of 700,000 new claims filed.
Continuing jobless claims fell to 4.12 million claims from the prior week’s reading of 4.14 million ongoing claims filed.
What’s Ahead
This week’s scheduled economic reporting includes readings on sales of new and previously-owned homes, inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.
Last week’s scheduled economic news included readings on construction spending and labor sector reports on public and private sector jobs. The national unemployment rate was published along with weekly readings on mortgage rates and jobless claims. Federal Reserve Chair Jerome Powell also spoke at a jobs summit.
Construction Spending Rises in January
U.S construction spending rose at a seasonally-adjusted annual pace of 1.70 percent in January as compared to 1.10 percent growth reported in December. Year-over-year construction spending was 5.80 percent higher in January 2021. Residential construction spending reported in January rose to $713 billion on a seasonally-adjusted annual basis as compared to December 2020’s construction spending pace of $695.70 billion.
Non-residential construction spending in the private sector rose to a seasonally-adjusted annual rate of $447 billion in January as compared to December 2020’s pace of $445.2 billion.
High demand for single-family homes persists as inventories of available homes fall. This scenario contributes to affordability issues that are also influenced by rising building materials costs.
Mortgage Rates, Jobless Claims Mixed
Freddie Mac reported higher rates for 30-year fixed-rate mortgages, which rose by five basis points and averaged 3.02 percent. Rates for 15-year fixed-rate mortgages were unchanged from the prior week and averaged 2.34 percent. Mortgage rates for 5/1 adjustable rate mortgages dropped by 26 basis points and averaged 2.73 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.
First-time jobless claims rose to 745,000 new claims filed as compared to the prior week’s reading of 736,000 new claims filed. Ongoing jobless claims fell last week with 4.30 million continuing claims filed; 4.42 million ongoing claims were filed during the prior week.
Private- Sector Jobs Fall as Public-Sector Jobs Increase
ADP reported 117,000 private-sector jobs added in February as compared to January’s reading of 195,000 private-sector jobs added. The government’s Non-Farm Payrolls report for February showed 379,000 public and private sector jobs added in February; 166,000 public and private-sector jobs were added in January. The national unemployment rate fell to 6.20 percent as compared to January’s reading of 6.30 percent.
Fed Chair Promised to Hold Steady on Monetary Policy
Fed Chair Jerome Powell promised to maintain accommodative monetary policies for the foreseeable future as the Federal Reserve continues striving toward its dual mandate of achieving maximum employment and annual inflation of two percent. When asked about rising long-term rates, Mr. Powell said that he could not commit to reducing the Fed’s asset purchases as he thought that the Fed’s goal of achieving maximum employment was “highly unlikely.”
What’s Ahead
This week’s economic reporting includes readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.
Last week’s scheduled economic reporting included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.
Inflation Rate Rises in November
Inflation rose by 0.20 percent in November according to the federal government, but this reading fell short of the Federal Reserve’s goal of achieving 2.00 percent inflation annually. November’s year-over-year inflation rate was 1.20 percent. October’s inflation reading was flat and analysts expected inflation to grow by 0.10 percent in November.
Core inflation, which excludes volatile food and fuel sectors, showed readings identical to the Consumer Price Index reading. November’s Core Consumer Price Index was impacted by lower food and fuel costs.
Supreme Court Hears Arguments in Shareholder Suit over Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac were put under the oversight of the Federal Housing Finance Agency after the Great Recession and resulting mortgage crisis. The Supreme Court heard oral arguments regarding shareholder assertions that oversight of Fannie Mae and Freddie Mac is unconstitutional.
Mortgage Rates Mixed as Jobless Claims Rise
Freddie Mac reported no change in average fixed mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.71 percent; the average rate for 15-year fixed-rate mortgages was also unchanged at 2.26 percent. Rates for 5/1 adjustable rate mortgages averaged 2.79 percent and were seven basis points lower than in the prior week. 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.
First-time jobless claims were higher last week with 853,000 new claims filed as compared to 716,000 first-time claims filed the prior week. Analysts expected 720,000 first-time claims last week. Ongoing jobless claims also rose with 5.76 million claims filed as compared to the prior week’s reading of 5.53 million continuing claims filed. Increasing numbers of coronavirus cases caused higher than expected layoffs last week.
The University of Michigan’s Consumer Sentiment Index rose in December to an index reading of 81.4. Analysts expected December’s reading to decrease to 75.5 based on November’s index reading of 76.9. As winter progresses and Covid-19 cases continue to rise, consumer sentiment toward economic conditions will likely decline.
What’s Ahead
This week’s scheduled economic readings include reports from the National Association of Home Builders on housing market conditions; the Commerce Department will release reports on housing starts and building permits issued. The Federal Reserve will issue its Federal Open Market Committee Statement and Fed Chair Jerome Powell is slated to give a post-meeting press conference.
Last week’s economic reports included pending home sales, construction spending, and labor-sector readings on job growth and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also published.
Construction Spending Rises as Demand for Homes Increases
High demand for single-family homes drove construction spending up by 1.30 percent to a seasonally adjusted annual pace of $1.44 trillion in October. The Commerce Department adjusted September’s reading to -0.50 percent. Analysts said that spending for commercial construction was flat after three successive months of lower spending. Business closures and a growing trend for working from home softened demand for commercial developments.
Pending home sales dropped by -1.10 percent in October as compared to September’s decline of -2.00 percent. Declines in pending home sales resulted from seasonal slowing in housing markets and rising cases of the coronavirus. Rising home prices caused by high demand for homes also caused fewer pending home sales. Uncertain economic conditions and concerns about the pandemic also contributed to the slower pace of home sales.
Mortgage Rates and Jobless Claims Drop
Mortgage rates dropped to record lows as the average rate for 30-year fixed-rate mortgages dropped by one basis point to 2.71 percent; the average rate for 15-year fixed-rate mortgages dropped by two basis points to 2.26 percent. The average rate for 5/1 adjustable rate mortgages dropped 30 basis points to 2.86 percent. Discount points for 30-year fixed-rate mortgages averaged 0.70 percent; discount points for 15-year fixed-rate mortgages averaged 0.60 percent. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent; all average points readings were unchanged from the prior week.
Initial and continuing jobless claims were lower last week. Initial jobless claims fell to 712,000 claims filed as compared to the prior week’s reading of 781,000 first-time claims filed; analysts expected 780,000 initial claims to be filed. Ongoing jobless claims also fell last week with 5.52 million continuing claims filed as compared to 6.09 million ongoing claims filed in the prior week.
Public and Private-Sector Job Growth Falls in November
ADP reported 307,000 private-sector jobs added in November as compared to October’s reading of 404,000 jobs added. The government’s Non-Farm Payrolls report showed 245,000 public and private sector jobs added in November as compared to October’s reported 610,000 jobs added. The national unemployment rate fell to 6.70 percent in November from 6.90 percent reported in October. Lower rates of job growth coupled with a lower unemployment rate suggested that some workers left the jobs market.
What’s Ahead
This week’s scheduled economic reports include readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.
Last week’s economic reporting included readings on Case-Shiller Home Price Indices, new home sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released. No readings were released on Thursday or Friday due to the Thanksgiving holiday.
Case-Shiller Reports Highest Pace Of Home Price Growth Since 2014
Case-Shiller reported higher home price growth in September with national home price growth of 7.00 percent on a seasonally adjusted annual basis. August’s national home price growth pace was 5.80 percent. Housing markets in many areas are seeing increased activity due to higher demand for homes.
While higher home prices appear counter-intuitive during the pandemic and related economic challenges, the coronavirus pandemic has created more demand for homes as buyers move from congested urban metro areas to less populated areas. Buyers continued seeking larger homes as working from home and remote learning increased.
Phoenix, Arizona, Seattle, Washington and, San Diego, California maintained the top three ratings for home price growth in the 20-City Home Price Index. New York, New York, and Dallas, Texas reported the lowest rates of home price growth due to large numbers of Covid-19 cases reported earlier this year.
In related news, the Commerce Department reported 999,000 sales of new homes on an annual basis in October. The year-over-year gain was 41.50 percent higher than one year ago.
Mortgage Rates, Jobless Claims Mixed
Freddie Mac reported no change in average rates for fixed-rate mortgages, which averaged 2.72 percent for 30-year fixed-rate mortgages and 2.28 percent for 15-year fixed-rate mortgages. and an increase of 0.31 basis points for 5/1 adjustable rate mortgages, which averaged 3.16 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.
Initial jobless claims rose last week with 778,000 first-time claims filed. Analysts expected 720,000 claims based on the prior week’s reading of 748,000 initial jobless claims filed. Ongoing claims fell to 6.07 million claims filed as compared to the prior week’s reading of 6.37 million continuing jobless claims filed.
The University of Michigan reported a lower reading for consumer sentiment in November with an index reading of 76.9. Analysts expected a reading of 76.8 and the prior month’s reading was 77.0. Rising numbers of Covid-19 cases will likely cause further declines in consumer sentiment.
What’s Ahead
This week’s scheduled economic reporting includes readings on pending home sales, construction spending, and labor-sector reports on public and private sector jobs and the national unemployment rate.
Last week’s economic reporting included readings on housing market conditions, sales of previously owned homes, and housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims were also released.
NAHB: Homebuilder Confidence Hits Record High in November
The National Association of Home Builders reported a fourth consecutive record high for builder confidence as November’s index reading of 90 exceeded October’s reading of 80. Any reading over 50 indicates that most home builders are confident about housing markets.
Component readings for the Housing Market Index also rose. Builder confidence in current market conditions rose six points to 96. Builder confidence in housing market conditions within the next six months rose one point to 89 and builder confidence in buyer traffic in new housing developments increased by three points to an index reading of 77. Readings of 50 or more for buyer traffic were rare until recent months. Factors driving builder confidence include high demand for homes and record low mortgage rates. High demand for single-family homes is rising due to relocation to suburbs and increased demand for larger homes.
Housing Starts Increase as Building Permits Issued Hold Steady
Commerce Department readings for October show that housing starts rose to 1.530 million starts on a seasonally-adjusted annual basis. Analysts expected a pace of 1.490 million housing starts based on 1.459 million starts reported in September. 1.545 million building permits were issued in October, which matched September’s reading.
Mortgage Rates Hit Another Record Low; Jobless Claims Data Mixed
Freddie Mac reported new record low mortgage rates for the fourth consecutive week. Rates for 30-year fixed-rate mortgages averaged 12 basis points lower at 2.72 percent; rates for 15-year fixed-rate mortgages averaged 2.28 percent and were six basis points lower. Rates for 5/1 adjustable rate mortgages dropped by 26 basis points to 2.85 percent on average. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.
First-time jobless claims rose to 742,000 claims filed; analysts expected 710,000 claims filed based on the prior week’s reading of 711,000 initial jobless claims filed. Ongoing jobless claims fell to 6.37 million claims filed as compared to 680,000 continuing jobless claims filed in the prior week.
October sales of previously-owned homes rose to 6.85 million sales on a seasonally-adjusted annual basis as compared to September’s reading of 6.80 million sales of previously-owned homes.
What’s Ahead
This week’s scheduled economic reporting includes readings from Case-Shiller Indices on home prices; new home sales will also be released along with the University of Michigan’s report on consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.
Last 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.
Last week’s economic reporting included readings on inflation, retail sales, and consumer sentiment. Weekly readings on average mortgage rates and jobless claims were also released.
Inflation Rate Slows as Retail Sales Increase
Inflation rose 0.20 percent in September, which was the slowest growth rate in four months. Analysts credited the rise in consumer prices to less post-pandemic price shock as consumers adjusted to higher prices for goods. Consumer prices were boosted by used vehicle prices, which increased at their highest pace in 51 years. Core consumer prices, which exclude volatile food and fuel sectors, also rose by 0.20 percent in September as compared to August’s reading of 0.40 percent.
The Commerce Department reported higher retail sales growth in September at a pace of 1.90 percent as compared to the expected reading of 1.20 percent and August’s reading of 0.60 percent growth in sales. Retail sales excluding the automotive sector grew by 1.50 percent in September and exceeded expected sales growth of 0.30 percent, and August’s retail sales growth of 0.50 percent.
Mortgage Rates Fall to New Record Low, Jobless Claims Data Mixed
Freddie Mac reported new record lows for average mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by six basis points to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.35 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages rose by one basis point to 2.90 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages and 0.50 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.20 percent.
Last week’s jobless claims data showed mixed readings as initial jobless claims rose to 898,000 claims filed and surpassed the expected reading of 825,000 new claims filed and the prior week’s reading of 845,000 initial jobless claims filed. 10.02 million continuing jobless claims were filed last week as compared to 11.18 million ongoing claims filed in the prior week.
The University of Michigan’s Consumer Sentiment Index rose in October with an index reading of 81.2; this surpassed the expected reading of 79.9 and September’s reading of 80.4. October’s higher index readings suggest that consumers are adjusting to new economic realities caused by the pandemic and revising their expectations accordingly. The upcoming holiday season’s data for retail sales and consumer sentiment will provide additional indications of how Americans are coping with and recovering from the COVID-19 pandemic.
What’s Ahead
This week’s scheduled economic reports include readings from the NAHB on U.S. housing markets Commerce Department readings on housing starts and building permits issued. Data on sales of previously-owned homes will be released along with weekly readings on mortgage rates and jobless claims.
Last week’s economic news included readings from Case-Shiller Home Price Indices, along with data on new and pending home sales. Weekly readings on mortgage rates and new and continuing jobless claims were also published.
Case-Shiller: Home Price GrowthHolds Steady in June
National home prices grew at a seasonally-adjusted annual pace of 4.30 percent in June, which was unchanged from May’s year-over-year growth rate for home prices. The 20-City Home Price Index rose by 3.50 percent year-over-year in June.
Phoenix, Arizona reported the leading year-over-year home price growth rate of 9.00 percent. Seattle, Washington held second place with a year-over-year home price growth rate of 6.50 percent. Home prices in Tampa, Florida grew at a year-over-year pace of 5.90 percent.
Home price growth rates rose in five of 19 cities reported in the 20-City Index; the Wayne County Michigan metro area did not report for June’s 20-City Home Price Index.
New Home Sales Rise as Pending Home Sales Dip in July
Sales of new homes rose for the third consecutive month in July according to the U.S. Census Bureau. July’s reading of 901,000 new homes sold on a seasonally adjusted annual basis was the highest pace of sales since 2006. Sales of new homes were 36 percent higher year-over-year. Slim inventories of pre-owned homes for sale and low mortgage rates boosted new home sales, but analysts said that builders also face headwinds including higher materials costs and affordability.
Pending home sales dropped in July from June’s year-over-year reading of 15.80 percent to July’s reading of 5.80 percent. Ongoing concerns over COVID-19, high unemployment rates and, concerns over jobs have caused would-be-homebuyers to delay their home purchase plans.
Mortgage Rates, Jobless Claims Fall
Freddie Mac reported lower rates for fixed-rate mortgages last week with the average rate for 30-year fixed-rate mortgages falling by eight basis points to 2.91 percent. The average rate for 15-year fixed-rate mortgages also fell by eight basis points to 2.46 percent. Rates for 5/1 adjustable rate mortgages averaged 2.91 percent and were unchanged from the prior week.
New jobless claims fell to 1.01 million claims filed from the prior week’s reading of 1.10 million initial claims filed. Continuing jobless claims were also lower with 14.54 million continuing claims filed as compared to the previous week’s reading of 14.76 million continuing jobless claims filed.
What’s Ahead
This week’s scheduled economic reports include readings on construction spending, private and public sector jobs growth, and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be released.
Last 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.
Last week’s economic reports included readings from Case-Shiller Housing Market Indices, pending home sales, and inflation. Weekly readings on mortgage rates and first-time jobless claims were also released.
Case-Shiller: February Home Price Data Positive Before Coronavirus Impact
February data on home prices showed rising home prices; the Case-Shiller National Home Price Index showed 4.20 percent growth in home prices year-over-year as compared to January’s home price growth rate of 3.90 percent.
Case-Shiller’s 20-City Home Price Index rose by 0.40 percent from a year-over-year rate of 3.10 percent to 3.50 percent. Home prices increased in all of the 20 cities included in the Index; 17 of the 20 cities reported a greater rate of price growth than for January. Phoenix, Arizona led the 20-City Index with 7.50 percent year-over-year growth in home prices and home prices in Seattle, Washington grew by 6.00 percent year-over-year. Tampa, Florida, and Charlotte, North Caroline were tied for third place with home price growth rates of 5.20 percent.
Factors supporting continued home price growth included short supplies of available homes, strong demand for homes, and mortgage rates near all-time lows.
Fed’s Federal Open Market Committee Holds Fed Rate Range Steady
The post-meeting statement of the Federal Open Market Committee showed no change in the Federal Reserve’s target federal funds rate range of 0.00 to 0.25 percent. The committee expects the ongoing national health crisis to “weigh heavily on economic activity, employment, and inflation in the near term.” FOMC members voted to maintain an accommodative stance on monetary policy until economic conditions again support the Fed’s dual mandate of achieving maximum employment and price stability,
Inflation rates were quashed in March as the coronavirus spread in the U.S, The Consumer Price Index fell -7.50 percent in March as compared to February’s growth rate of -0.20 percent. Analysts expected a March inflation rate of -6.90 percent. Core inflation, which excludes volatile food and fuel sectors, fell by -0.10 percent and met expectations but was lower than February’s core inflation reading of -0.20 percent.
Mortgage Rates Fall to Record Lows, New Jobless Claims Fall
Freddie Mac reported the lowest mortgage interest rates ever recorded with rates for a 30-year fixed-rate mortgage 10 basis points lower at an average of 3.23 percent. Rates for 15-year fixed-rate mortgages averaged nine basis points lower at 2.77 percent.
The average rate for 5/1 adjustable rate mortgages fell by 14 basis points to 3.14 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.40 percent for 5/1 adjustable rate mortgages.
First-time jobless claims fell last week but remained well above numbers seen before the coronavirus pandemic. 3.84 million new jobless claims were filed, which surpassed expectations of 3.50 million new claims filed and the prior week’s reading of 4.40 million new claims filed.
What’s Ahead
This week’s scheduled economic readings include reports on public and private sector jobs, the national unemployment rate, and weekly reports on mortgage rates and new jobless claims.
Last week’s scheduled economic news included readings on sales of new and previously-owned homes and consumer confidence. Weekly readings on mortgage rates and new jobless claims were also released.
COVID-19 Requirements Impact Home Sales
Widespread state and local requirements for sheltering at home negatively impacted home sales in March. New homes sold at an annual pace of 627,000 sales as compared to 741,000 sales reported in February. Analysts estimated 628,000 sales for March according to the Commerce Department.
The National Association of Realtors® reported lower sales of previously-owned homes in March with an annual pace of 5.27 million sales. February’s annual sales rate was 5.76 million homes. Sales of pre-owned homes exceeded analysts’expectations of 5.24 million existing homes sold annually.
Annual sales calculated for March were 8.50 percent lower than February’s reading. Lawrence Yun, the chief economist of the National Association of Realtors®, said that the organization expected home sales to fall in March and expected fewer home sales in April.
The COVID-19 outbreak impacted both home sellers and buyers as restrictions on open houses and home tours limited sellers’ability to show their homes; prospective buyers delayed their home shopping activities due to COVID-19 restrictions and job losses related to business closures.
Mortgage Rates Mixed, Jobless Claims Lower
Freddie Mac reported higher fixed mortgage rates last week; rates for 5/1 adjustable rate mortgages dropped. The average rate for 30-year fixed-rate mortgages rose two basis points to 3.33 percent; rates for 15-year fixed-rate mortgages rose six basis points and averaged 2.86 percent. Rates for 5/1 adjustable rate mortgages fell by six basis points on average to 3.28 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
First-time jobless claims remained far above average last week but were lower than the prior week. 4.43 million initial unemployment claims were filed last week as compared to 5.24 million claims filed the prior week. Analysts expected a reading of four million new claims filed last week.
April’s Consumer Sentiment Index reading fell to an index reading of 71.8 from the March reading of 89.1 Analysts expected a reading of 69.3. The University of Michigan said that the Index reading from March to April showed the steepest drop in Index history. Analysts said that April’s reading indicated an economic recession.
What’s Ahead
This week’s scheduled economic reports include Case-Shiller Home Price Indices, pending home sales, and the post-meeting statement of the Fed’s Federal Open Market Committee. Fed Chair Jerome Powell will give a press conference after the FOMC statement. Construction spending data will be released along with weekly readings for mortgage rates and new jobless claims.
Last week’s scheduled economic reporting included readings on home builder sentiment, housing starts and building permits issued. Weekly reports on mortgage rates and initial jobless claims were also released
NAHB: Homebuilder Confidence Crashes as Coronavirus Impacts Construction
Homebuilder sentiment concerning housing market conditions dropped significantly in April according to the National Association of Home Builders Housing Market Index.
April’s index reading of 30 was the largest month-to-month drop recorded since the Housing Market Index started 30 years ago. Homebuilder confidence was 42 points lower than the March reading of 72 and was the lowest reading since June 2012.
Index readings over 50 indicate that most builders are confident in current market conditions.
Sub-index readings also fell considerably in April; builder confidence in current market conditions dropped from 79 to 36. Builder confidence in housing market conditions over the next six months dipped to an index reading of 36 in April as compared to the March reading of 75.
Builder confidence in buyer traffic in new single-family housing developments dropped from an index reading of 56 in March to a reading of 13 in April; builder sentiment readings about buyer traffic don’t usually exceed an index reading of 50 but had done so in recent months. Homebuilders also said that federal assistance for builders wasn’t distributed consistently; Builders need federal financial help to maintain payrolls and other expenses.
Commerce Department readings on housing starts and building permits issued dropped in March. Housing starts progressed at a seasonally-adjusted annual rate of 1.216 million starts as compared to February’s pace of 1.564 million housing starts.
Analysts expected a March reading of 1.290 million housing starts. Building permits issued were lower at 1.353 million permits issued as compared to 1.452 million permits issued on an annual basis in February. Analysts expected a March reading of 1.250 million building permits issued.
Mortgage Rates Near All-Time Lows as Initial Jobless Claims Slow
Freddie Mac reported mixed results for mortgage rates last week; rates for 30-year fixed-rate mortgages averaged 3.31 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.80 percent and were three basis points higher. Rates for 5/1 adjustable-rate mortgages fell by six basis points and averaged 3.34 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.
First-time jobless claims were lower last week but remained much higher than readings reported before the COVID-19 outbreak. 5.25 million initial claims were filed, which surpassed expectations of 5 million new claims filed. 6.60 million claims were filed the prior week.
What's Ahead
This week’s scheduled economic releases include readings on new and existing home sales, consumer sentiment and weekly reports on mortgage rates and new jobless claims.
