Last week’s economic reporting included readings from the National Association of Home Builders, data on sales of existing homes, and reports on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builder Confidence Unchanged in May

The National Association of Home Builders Housing Market Index reading for May was unchanged from April’s reading of 83. Readings higher than 50 indicate that most home builders were positive about housing market conditions.

Component readings for builder confidence in housing market conditions in May were mixed; builder confidence in current market conditions was unchanged with an index reading of 83; builder confidence in market conditions in the next six months rose one point to 81 and builder confidence in buyer traffic in new single-family housing developments dropped one point to 73. Readings for buyer traffic rarely exceeded 50 before the pandemic.

Robert Dietz, NAHB’s chief economist said that costs of land, labor, and building materials were expected to rise throughout 2021 and would drive home prices higher. Lower interest rates, shortages of pre-owned homes for sale, and interest in relocating to less congested suburban and rural areas continued to increase demand for single-family homes against severe shortages of homes for sale. Rapidly rising home prices squeezed first-time and moderate-income home buyers out of the market and caused some sales to fall through.

Sales of previously-owned homes fell in April and supported concerns about shortages of available homes. 5.85 million homes were sold on a seasonally adjusted annual basis, which was lower than the expected reading of 6.02 million sales and the March reading of 6.01 million sales of previously-owned homes. Rising home prices and short supplies of homes for sale continued to create high demand for homes.

Housing Starts Fall in April; Building Permits Issued Rise

The Commerce Department reported a sharp decrease in housing starts in April with 1.57 million starts on a seasonally-adjusted annual basis. March housing starts were revised downward to 1.73 million starts, but this did not affect April’s reading being the highest pace of housing starts since 2006. Housing starts fell in the Midwest and South and rose in the Northeast and West.

Building permits held steady in April at a seasonally-adjusted annual pace of 1.76 million permits issued. Analysts expected 1.77 million building permits issued.

Mortgage Rates Rise; Jobless Claims Mixed

Mortgage rates rose last week as rates for 30-year fixed-rate mortgages rose by six basis points to 3.00 percent on average. Rates for 15-year fixed-rate mortgages averaged 2.79 percent and were three basis points higher. Rates for 5/1 adjustable rate mortgages were unchanged at an average rate of 2.59 percent. Discount points averaged 0.60 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 444,000 initial claims filed last week from the previous week’s reading of 478,000 new claims filed. Continuing jobless claims rose to 3.75 million claims filed as compared to the prior week’s reading of  3.64 million ongoing jobless claims filed.

What’s Ahead

This week’s economic reporting includes readings from Case-Shiller Home Price Indices, data on new and pending home sales, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims will also be released.

Last week’s economic reports included readings on inflation, core inflation, and the University of Michigan’s  Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims were also released.

April Inflation Rate Hits 13-Year High

The federal government’s Consumer Price Index rose by 0.80 percent in April as compared to the March reading of 0.60 percent. Analysts expected inflation to increase by 0.20 percent in April. Core inflation, which excludes volatile food and fuel sectors, rose by 0.90 percent in April. Analysts expected core inflation to grow by 0.30 percent in April which would have been unchanged from the March reading of 0.30 percent Core inflation rose month-to-month at the fastest pace in forty years and grew by three percent year-over-year, which was the highest growth rate since September 2008.

Consumer gas prices surpassed $3.00 per gallon for the first time since 2014; last week’s shutdown of Colonial Pipeline’s main transmission line was expected to drive gasoline prices higher. Prices of used cars and trucks rose 10 percent in April and contributed to a 21 percent increase in used vehicle prices year-over-year. Costs for shelter rose 2.10 percent year-over-year and were 0.0 percent higher month to month. Analysts noted that high inflation rates are caused in part by the low pace of inflation reported during the pandemic. Inflation Growth percentages are higher than they would have been if inflation had not slowed during the pandemic.

Mortgage Rates, Jobless Claims, and Consumer Sentiment Fall

Freddie Mac reported lower average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.94 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages averaged 2.26 percent and were four basis points lower; the average rate for 5/1 adjustable rate mortgages dropped by 11 basis points to 2.59 percent. Discount points averaged 0.70 percent, 0.60 percent, and 0.30 percent respectively.

First-time jobless claims were lower last week with 473,000 initial claims filed as compared to the prior week’s reading of 507,000 new jobless claims filed. Continuing jobless claims were also lower with 3.66 million ongoing claims filed; 3.70 million continuing jobless claims were filed in the prior week. The University of Michigan’s Consumer Sentiment Index reading was lower in May with a reading of  82.8 as compared to the expected reading of  90.1 and April’s index reading of 88.3.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing markets, data on sales of previously-owned homes,  and Commerce Department readings on housing starts and building permits issued. Minutes of the Fed’s most recent Federal Open Market Committee meeting will be released along with weekly readings on mortgage rates and jobless claims

Last week’s economic reporting included readings from Case-Shiller Home Price Indices, data on pending home sales, and a statement from the Fed’s Federal Open Market Committee. The University of Michigan released its Consumer Sentiment Index and weekly reports on mortgage rates and jobless claims were also published.

Case-Shiller: February Home Prices Rose at Fastest Pace Since 2006

National home prices rose at a seasonally adjusted annual pace of 12.00 percent, which was the fastest pace of year-over-year home price growth in 15 years.  Case-Shiller’s 20-City Home Price Index reported 11.90 percent home price growth year-over-year and 1.20 percent growth month-to-month. All 20 cities reported in
February.

Phoenix, Arizona held its lead with 17.40 percent year-over-year home price growth followed by San Diego, California with 17.00 percent annual home price growth. Seattle, Washington reported 15.40 percent year-over-year home price growth. Rapidly rising home prices were fueled by high demand for homes and slim supplies of homes for sale. Mortgage rates remained below three percent, but rising home prices presented obstacles for first-time and moderate-income buyers as they competed with cash buyers and well-qualified buyers.

The Federal Housing Finance Agency reported that home prices for single-family homes owned or financed by Fannie Mae and Freddie Mac grew by 12.20 percent year-over-year and 0.90 percent month-to-month.

Federal Reserve Holds Benchmark Interest Rate Range Steady

The Federal Open Market Committee of the Federal Reserve voted to hold its key interest rate range steady at 0.00 to 0.25 percent. Although the Fed noted that the economy was improving, Fed Chair Jerome Powell said that the Fed was far from achieving its dual goal of achieving maximum employment and an annual inflation rate of 2.00 percent.

Pending home sales data provided further evidence of economic improvement in March; Home sales for which offers were received but not completed rose to a year-over-year pace of 1.90 percent. Analysts expected pending home sales to grow by 5.40 percent after February’s negative reading of -10.60 percent growth for pending home sales. Pending home sales usually depend on mortgage approval to be completed; lower mortgage rates encouraged buyers to enter the market, but high home prices and strict mortgage approval requirements could cause some pending sales to fall through.

Mortgage Rates, Jobless Claims

Freddie Mac reported little change in average fixed mortgage rates last week. Rates for a 30-year fixed-rate mortgage averaged 2.98 percent and rose by one basis point. Rates for 15-year fixed-rate mortgages averaged 2.31 percent and were two basis points higher. The average rate for 5/1 adjustable rate mortgages fell by 19 basis points to 2.64 percent; discount points for fixed-rate mortgages averaged 0.70 percent and rates for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell to 553,000 initial claims filed as compared to the prior week’s reading of 566,000 first-time claims filed in the prior week.

Last week’s scheduled economic news included readings on sales of new and previously-owned homes and weekly reports on jobless claims and mortgage rates.

March Sales of  Previously-owned Homes Dip; New Home Sales Rise

Sales of single-family homes fell in March as demand for homes exceeded availability. 6.01 million previously-owned homes were sold in March on a seasonally-adjusted annual basis; analysts expected a pace of 6.11 million sales based on February’s reading of 6.24 million sales of existing homes. The March reading for sales of pre-owned homes was 3.70 percent lower year-over-year and was the lowest sales pace reported since August 2020.

High demand for homes coupled with low inventories of available homes constricted sales. Lawrence Yun, chief economist of the National Association of Realtors® said, “Sales for March would have been measurably higher had there been more inventory.” Mr. Yun also addressed affordability concerns arising from lean inventories of homes and high demand. “Without an increase in supply, the society’s wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners.” 

The average price of a single-family home in the U.S. rose to $329,100 in March, which indicates year-over-year growth of 17.20 percent in home prices. While a six-month supply of homes for sale indicates an average inventory, the March inventory of homes for sale rose to a 2.10-month supply from February’s 2.0- month inventory of homes for sale.

Shortages of existing homes for sale boosted March sales of new homes, which sold at a seasonally-adjusted annual pace of 1.02 million sales. Analysts expected 888,000 new homes to be sold year-over-year in March based on February’s sales pace of 846,000 new homes sold. Rapidly rising materials costs created obstacles for builders and limited their ability to meet the need for affordable homes, but they raced to meet the ongoing demand for homes.

Mortgage Rates Mixed; Jobless Claims Fall

Average mortgage rates fell below three percent last week; the rate for 30-year fixed-rate mortgages dropped by seven basis points to 2.97 percent. Rates for 15-year fixed-rate mortgages averaged 2.29 percent and were six basis points lower. Rates for 5/1 adjustable rate mortgages rose by three basis points to an average rate of 2.83 percent.

Jobless claims were lower last week with 547,000 new claims filed; analysts expected 603,000 initial claims filed. 586,000 first-time claims were filed in the prior week. Claims were also lower for ongoing claims filed. 3.67 million continuing jobless claims were filed as compared to 3.67 million continuing claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reports include readings from Case-Shiller Home Price Indices, data on pending home sales, and the University of Michigan’s consumer sentiment index. Weekly readings on mortgage rates and jobless claims will also be published.

Last week’s economic news included readings from the National Association of Home Builders on housing markets along with Commerce Department readings on housing starts and building permits issued.  Fed Chair Jerome Powell appeared on 60 Minutes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Homebuilder Confidence Ticks Up

The National Association of Home Builders reported that home builders’ confidence in housing market conditions rose one point to an index reading of 83. Builder confidence readings over 50 indicate that most builders consider housing market conditions as positive.

Component readings used for the NAHB Housing Market Index were varied. Builder confidence in current market conditions rose one point to 88 and home builders’ confidence in housing markets over the next six months fell two points to 83. The index reading for home buyer traffic in new housing developments rose three points to 75. Homebuilders faced ongoing challenges including supply chain problems, rising materials prices, and meeting the need for affordable homes.

In related news, the Commerce Department reported a seasonally adjusted annual pace of 1.74 million housing starts in March. 1.77 million building permits were issued at a seasonally adjusted annual pace in March.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages dropped by nine basis points to 3.04 percent; rates for 15-year fixed-rate mortgages dropped by seven basis points to 2.35 percent. Rates for 5/1 adjustable rate mortgages averaged 2.80 percent and were 12 basis points lower. Discount points for fixed-rate mortgages averaged 0.70 percent for fixed-rate mortgages and  0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 576,000 claims filed last week as compared to 769,000 initial claims filed the previous week. Ongoing jobless claims were unchanged from the prior week at 3.73 million claims filed.

The Commerce Department released inflation data for March. The Consumer Price Index rose by 0.60 percent as compared to February’s growth rate of 0.40 percent; analysts expected a March reading of 0.50 percent. Core inflation, which excludes volatile food and fuel sectors rose 0.30 percent in March and exceeded expectations of 0.20 percent growth. Core inflation rose by 0.10 percent in February.

Fed Chair Jerome Powell appeared on 60 Minutes on Sunday; he said that that the global economy would not return to normal until the COVID pandemic is controlled, but he presented a brighter picture for the U.S. economy. He said that the national economy is expected to grow between six to seven percent and that the national unemployment rate could fall to four or five percent from its current rate of six percent.

What’s Ahead

This week’s scheduled economic news includes readings on readings on sales of new and previously-owned homes and weekly readings on mortgage rates and jobless claims.

The S&P Case-Shiller National Home Price Index posted its highest gain in nearly 15 years with a year-over-year home price growth rate of 11.20 percent in January. The December 2020  National Home Price Index reported 10.40 percent home price growth. The S&P Case-Shiller 20-City Home Price Index reported 11.10 percent year-over-year growth with 19 of 20 cities reporting higher home prices. Cleveland, Ohio was the only city reporting no home price growth in January. Detroit, Michigan reported home price growth data for the first time in nearly a year.

Phoenix, Seattle, and San Diego Home Prices are Hot, Hotter, and Hottest

Home prices in Phoenix, Arizona again topped Case-Shiller’s 20-City Home Price Index for January with a year-over-year home price growth rate of 15.80 percent. Seattle, Washington held its second-place position with home price growth of 14.30 percent, and San Diego, California held third position with year-over-year home price growth of 14.20 percent.

Rapidly rising home prices coupled with rising mortgage rates presented challenges for first-time and moderate-income buyers; some have revised their purchasing budgets downward while others have left the market. Analysts noted that buyers leaving the housing market could impact high demand and strong buyer competition which has fueled bidding wars and driven home prices ever higher in popular metro areas.

Craig Lazzara, managing director and head of index investment strategy at S&P Dow Jones Indices, said that January’s home price data supported the position that COVID encouraged buyers to leave congested urban areas for single-family homes in suburbia. He said that many of these households may have accelerated existing home-buying plans.

FHFA Posts 12 Percent Increase in Home Prices; Slowing Momentum

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a 12 percent year-over-year growth in prices of single-family homes owned or financed by the two government-sponsored mortgage companies. According to Lynn Fisher, FHFA’s deputy director of the division of research and statistics, home price growth slowed to its slowest pace since June. She wrote, “While house prices experienced historic growth rates in 2020 and into the New Year, the monthly gains appear to be moderating.”

Home prices are expected to continue growing in popular metro areas, but at a slower pace due to higher mortgage rates and would-be buyers leaving the market. Demand for homes may ease as COVID-driven flight from urban areas slows but families working from home and homeschooling their children also create demand for larger homes.

Last week’s economic reporting included data on inflation and job openings, and weekly readings n mortgage rates, and jobless claims.

Inflation Rate Rises in February

Consumer prices grew by 0.40 percent in February according to the federal government’s Consumer Price Index; the year-over-year inflation rate rose from January’s reading of 1.40 percent to 1.70 percent. Consumer prices rose at their fastest pace in six months as rising fuel prices caused the jump in consumer prices. The Core Consumer Price Index, which does not include volatile food and fuel sectors, rose by 0.10 percent in February and matched analysts’ expectations.

Analysts expect continued economic expansion as Americans receive stimulus checks, get covid-19 vaccinations, and businesses reopen.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 3.05 percent. Interest rates for 15-year fixed-rate mortgages averaged 2.38 percent and rose by four basis points. Rates for 5/1 adjustable rate mortgages also rose by four basis points to 2.77 percent on average.

Jobless claims fell to their lowest level since November. New jobless claims fell to 712,000 claims filed as compared to the prior week’s reading of 754,000 initial claims filed in the prior week. Analysts expected 725,000 first-time claims to be filed. Last week’s reading showed the lowest pace of new jobless claims since November 7, when 211,000 first-time claims were filed.

Continuing jobless claims fell to 4.14 million claims filed as compared to the prior week’s reading of 4.34 million claims filed.  Jobless claims averaged fewer than two million claims filed before the pandemic. Accurate counts of individuals receiving jobless benefits were questioned due to the discovery of fraudulent claims and duplicate counting of some recipients. Analysts were advised to focus on jobless claims trends rather than individual claims data.  

What’s Ahead

This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts, and building permits issued. The Federal Reserve’s Federal Open Market Committee will release its post-meeting statement and Fed Chair Janet Yellen will give a press conference. 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 economic reports included readings from Case-Shiller on home prices, the Federal Housing Finance Agency also reported on home prices and the Commerce Department released data on sales of new homes and pending home sales. The University of Michigan released its Consumer Sentiment Index, and weekly readings on mortgage rates and jobless claims were released.

Case-Shiller Home Price Indices Report Fastest Price Growth in 7 Years

The S&P Case Shiller National Home Price Index reported December home prices rose at the fastest pace since 2014. The National Home Price Index posted a year-over-year home price growth rate of 10.40 percent in December as compared to November’s home price growth rate of 9.50 percent.

Case-Shiller’s 20-City Home Price Index posted December home price growth at a year-over-year pace of 10.10 percent as compared to November’s home price growth rate of 9.20 percent according to Case-Shiller’s 20-City Home Price Index. Phoenix, Arizona home prices rose at a seasonally-adjusted annual pace of 14.40 percent; Seattle, Washington home prices held second place with 13.60 percent growth, and San  Diego, California held third place in the 20-City Home Price Index with 13.00 percent home price growth. 18 of 19 cities reported higher home prices;  Detroit Michigan did not report data for December.

The Federal Housing Finance Agency reported year-over-year home price growth of 11.40 percent in December for homes owned or financed by Fannie Mae and Freddie Mac. High demand for homes and short inventories of available and affordable homes created challenges for first-time and moderate-income home buyers. Builders said that rising materials costs and labor shortages continued to impact new home construction.

 

New Home Sales Increase as Shortages of Pre-Owned Homes Persist

The Census Bureau reported 823,000 sales of new homes in January on a seasonally-adjusted annual basis. Analysts expected 850,000 sales based on December’s reading of 885,000 new homes sold. Homebuyers are turning to new homes as supplies of previously-owned homes are in short supply. Shortages of previously-owned homes continued as homeowners stayed in their homes due to economic uncertainty, unemployment, and ongoing concerns over the pandemic.

 Pending home sales fell by - 2.80 percent in January as compared to December’s reading of - 0.50 percent.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose 16 basis points to 2.97 percent; the average rate for 15-year fixed-rate mortgages rose 15 basis points to 2.34 percent. Rates for 5/1 adjustable rate mortgages averaged 22 basis points higher at 2.99 percent. Discount points averaged 0.60 percent for fixed-rate home loans and 0.10 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 730,000 new claims filed from the prior week’s reading of  841,000 initial jobless claims filed. Ongoing jobless claims were also lower; 4.42 million continuing claims were filed last week as compared to 4.52 million ongoing claims filed in the prior week.

The University of Michigan reported an index reading of 76.80 for its Consumer Sentiment Index in February, as compared to January’s index reading of  76.20.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued along with data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders Index Rises One Point in February

Homebuilder confidence rose by one index point to 84 according to the National Association of Home Builders Housing Market Index. Readings over 50 in the Housing Market Index indicate that most homebuilders are confident about U.S. housing market conditions.

Component readings for the housing market index were mixed in February. Builder confidence in current market conditions for new single-family homes was unchanged with an index reading of 90; builder confidence in new home sales for the next six months fell by three points to a reading of 83. Builder confidence in buyer traffic in new single-family developments rose four points to an index reading of 72.  Before the pandemic, readings for buyer traffic in new housing developments were typically below 50, but the pandemic has created more interest in new single-family homes as families moved from congested urban areas to suburban areas.

Builders cited ongoing concerns including rising materials costs and affordability issues for first-time and low-income homebuyers.

Housing Starts Lower in January as Building Permits Rise

The Commerce Department reported fewer housing starts in January based on 1.58 million starts reported on a seasonally-adjusted annual basis, 1.67 million starts were reported in December and analysts expected a pace of 1.68 million housing starts for January.

Building permits issued rose in January to a seasonally-adjusted annual pace of 1.88 million permits. Analysts expected a reading of 1.67 million permits issued based on 1.70 million permits issued in December. Winter weather conditions likely contributed to fewer housing starts, but builders took out more building permits in anticipation of improving weather and continuing demand for homes due to shortages of available homes for sale and higher demand due to the covid-19 pandemic.

The National Association of Realtors® reported 6.69 million sales of previously-owned homes on a seasonally adjusted annual basis as of January. Low inventories of available homes and high demand for single-family homes continue to drive home sales during the pandemic. Rising home prices caused by high demand and low inventories of homes for sale created affordability issues in suburban areas as well as traditionally high-priced metro areas.

Mortgage Rates Rise, Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by eight basis points to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 2.77 percent and two basis points lower than the prior week.

Weekly jobless claims data was mixed last week with 861,000 initial jobless claims filed as compared to the prior week’s reading of 848,000 first-time jobless claims filed. Ongoing jobless claims fell to 4.49 million continuing claims as compared to the prior week’s reading of 4.56 million continuing jobless claims filed.

What’s Next

This week’s scheduled economic readings include S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency’s Home Price Index, and data on pending home sales. The University of Michigan will issue its reading on consumer sentiment and weekly readings on mortgage rates and jobless claims will also be published.

Last week’s scheduled economic reporting included readings on inflation, Federal Reserve Chair Jerome Powell’s speech on U.S. labor markets, and weekly readings on mortgage rates and jobless claims.

Oil Prices Push Inflation Higher in January

Rising oil and gasoline prices drove a jump in January’s consumer price index. Inflation rose 0.30 percent month-to-month, which matched analysts’ expectations. The year-over-year inflation rate rose to 1.40 percent but remained lower than the pre-pandemic annual pace of 2.30 percent. The core inflation rate, which excludes volatile food and energy sectors, was unchanged in January.

Some analysts expect stronger inflation throughout 2021 due to the impact of stimulus payments and the potential for covid-19 vaccines. Widespread vaccinations are expected to reduce quarantine requirements and local restrictions on businesses and workplaces.

Fed Chair Doesn’t Expect Lasting Jump in Inflation in Near Term

In remarks made during a speech to the Economic Club of New York, Federal Reserve Chair Jerome Powell said he anticipated neither “a large nor sustained” increase in inflation for the near future. Mr. Powell also said that rising prices caused by bursts of spending were not sustainable. “Inflation has been much lower and more stable over the past three decades than in earlier times.” The Fed Chair also observed that “In the 1970s  when inflation would go up, it would stay up.”

Mortgage Rates Hold Steady as Jobless Claims Decrease

Freddie Mac reported no change in the average rate of 2.73 percent for 30-year fixed-rate mortgages; the average rate for 15-year fixed-rate mortgages dropped by two basis points to 2.19 percent. The average rate for 5/1 adjustable-rate mortgages rose one basis point to 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and fell to 0.20 percent for 5/1 adjustable rate mortgages.

Jobless claims fell last week with 793,000 initial claims filed as compared to the prior week’s reading of 812,000 first-time claims filed. 4.55 million continuing jobless claims were filed last week as compared to 4.69 million ongoing claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reports include readings from 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 report on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims will also be published.

Last week’s economic news included Commerce Department readings on construction spending, labor sector reporting on public and private-sector job growth, and the national unemployment rate. Weekly reports on mortgage rates and jobless claims were also released.

Construction Spending Driven by Housing Sector in December

The Commerce Department reported a one percent gain in construction spending in December to a seasonally-adjusted annual pace of $1.49 trillion. Residential construction drove spending for the seventh consecutive month with a 3.10 percent gain in spending. Construction for public projects rose by 0.50 percent; private-sector spending on non-residential construction fell by -1.70 percent.

Demand for housing remained high as supplies of previously-owned homes ran below average and homebuyers turned to new housing developments. Flight to less congested metro areas continued to drive demand for single-family homes. Builders cited rising materials costs and land and labor shortages as ongoing challenges to building affordable homes.

Mortgage Rates Hold Steady as Job Growth Improves

Freddie Mac reported little change in average mortgage rates last week. The average rate for 30-year fixed-rate mortgages was unchanged at 2.73 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and one basis point higher. The average rate for 5/1 adjustable rate mortgages was two basis points lower at 2.78 percent. 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.

Public and private-sector job growth improved in January. ADP reported 174,000 private-sector jobs as compared to a negative reading of -78,000 jobs in December. Analysts forecasted 48,000 private-sector jobs added in January.

The federal government’s Non-Farm Payrolls report showed 49,000 public and private-sector jobs added, which fell short of the expected 50,000 jobs added, but the job growth reading was good news when compared to December’s reading of -227,000 jobs lost.  In related news, the national unemployment rate fell to 6.30 percent as compared to December’s reading of 6.70 percent 

Fewer Jobless Claims Filed

779,000 initial jobless claims were filed last week as compared to the prior week’s reading of 812,000 first-time claims filed. Continuing jobless claims also fell with 4.59 million ongoing claims reported; 4.79 million continuing claims were filed during the prior week.

What’s Ahead

This week’s scheduled economic reporting includes readings on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released

Last week’s economic reports included readings from S&P Case-Shiller Home Price Indices, readings on new and pending home sales,  and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices: Home Prices Rose Faster in November

The Case-Shiller National Home Price Index showed that November home prices grew by 9.50 percent on a seasonally-adjusted annual basis. October’s reading showed 8.40 percent home price growth; analysts expected a year-over-year pace of  8.80 percent for national home price growth.

Severe shortages of available homes coupled with high demand for homes continued to fuel rising home prices as builders faced rising materials costs. The covid pandemic added to home price growth, which is expected to slow as businesses and employers reopen and flight from congested urban areas slows.

The 20-City Home Price Index reported home price growth in 19 of 20 cities; Detroit, Michigan has not reported its data in recent months. Phoenix, Arizona, Seattle, Washington, and San Diego, California again held the top three places in the 20-City Index.

New Home Sales Rise in December

New homes sold at a seasonally-adjusted annual pace of 842,000 sales as compared to a sales pace of 829,000 homes sold in November. Pending home sales were lower in December with a -0.30 percent decline. Analysts forecasted a reading of -0.20 percent in pending sales based on November’s reading of -2.60 percent fewer pending home sales. Seasonal influences including winter weather and the holiday season typically cause home sales to fall during the winter months.

Mortgage Rates, Jobless Claims Lower

Freddie Mac reported lower fixed mortgage rates last week; the average rate for 30-year fixed-rate mortgages fell by four basis points to 2.73 percent. The average rate for 15-year fixed-rate mortgages fell one basis point to 2.20 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.80 percent. Discount points averaged 0.70 percent, 0.60 percent, and 0.30 percent respectively.

First-time jobless claims fell to 847,000 claims filed as compared to the prior week’s reading of 914,000 initial claims filed. Continuing jobless claims were also lower with 4.77 million claims filed. as compared to the previous week’s reading of 4.97 million claims filed.

The University of Michigan reported an index reading of 79.0 in January for its Consumer Sentiment Index. Analysts expected no change to December’s reading of 79.2. The continued spread of covid-19 and related economic concerns contributed to lower consumer sentiment.

What’s Ahead

This week’s scheduled economic readings include labor-sector reports on public and private obs growth and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be released.

Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, along with Commerce Department readings on housing starts and building permits issued. The National Association of Realtors® reported on sales of previously-owned homes; weekly readings on mortgage rates and jobless claims were also released.

NAHB: Home Builders’ Housing Market Index Falls in January

Homebuilder confidence in housing market conditions fell three points to an index reading of 83 in January. The National Association of Home Builders Housing Market Index expected a reading of 85 for January as compared to December’s index reading of 86. Increasing covid-19 cases and rising materials costs caused builder confidence to fall as builder concerns rose.

The NAHB Housing Market Index remained strong as any reading over 50 indicates positive builder sentiment toward housing markets. Component readings for January’s Housing Market Index also fell; builder confidence in current market conditions fell two points to an index reading of 90. Homebuilder confidence in market conditions for the next six months also fell two points to 83. Builder confidence in buyer traffic in new housing developments dropped five points to an index reading of 68. Readings of more than 50 for buyer traffic were rare until the covid-19 pandemic started.

Conflicting factors impacted home builder confidence readings. Home sales rose as urban homeowners sought new and larger homes in the suburbs and rural areas, labor shortages, and rising materials expenses worried home builders.

Housing Starts and Building Permits Rose in December

The Commerce Department reported a seasonally-adjusted annual pace of 1.67 million housing starts as compared to November’s reading of 1.547 million starts. Building permits issued rose in December with 1.709 million permits issued annually as compared to November’s reading of 1.635 million housing starts.

The National Association of Realtors® reported 6.76 million sales of previously-owned homes sold as of December on a seasonally-adjusted annual basis. Home sales are increasing although demand exceeds available inventory and home prices continue to rise.

Mortgage Rates, Jobless Claims Lower

Mortgage rates fell last week with the average rate for 30-year fixed-rate mortgages two basis points lower on average at 2.77 percent. Rates for 15-year fixed-rate mortgages averaged 2.21 percent and were two basis points lower. Rates for 5/1 adjustable rate mortgages averaged 2.80 percent and 32 basis points lower. 

First-time jobless claims fell to 900,000 claims filed as compared to the prior week’s reading of 926,000 new claims filed. Ongoing jobless claims were also lower last week with 5.05 million continued claims filed as compared to 5.18 million claims filed the previous week. 

What’s Ahead

This week’s scheduled economic reporting includes readings from Case-Shiller Home Price Indices, the FHFA House Price Index, and the Federal Reserve’s Statement from its Federal Open Market Committee. Monthly readings on new home sales and consumer sentiment will also be published. Weekly readings on mortgage rates and jobless claims will also be released.

Last week’s economic reports included readings on construction spending and reports on the national unemployment rate and job growth. Weekly reporting on mortgage rates and jobless claims were also published.

Construction Spending Increases as Demand for Homes Rises

Homebuilders responded to increased demand for single-family homes and increased their spending in November. Construction spending rose by 0.90 percent as compared to projected spending of 1.10 percent and  1.60 percent growth in November. Demand for homes increased in recent months due to the coronavirus pandemic. Homeowners left urban areas and bought larger homes in suburban and rural areas. Low mortgage rates, flight from cities, and needs related to working from home and homeschooling fueled demand for single-family homes.

Construction spending tapered off in November due to seasonal slowdowns and winter weather but is expected to continue growing as record-low mortgage rates encouraged prospective and current homeowners to seek larger homes.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported lower rates for fixed-rate mortgages as the average rate for 5/1 adjustable rate mortgages rose. Rates for 30-year fixed-rate rate mortgages fell by two basis points to 2.65 percent. The average rate for 15-year fixed-rate mortgages dropped by one basis point to 2.16 percent. Rates for 5/1 adjustable rate mortgages averaged 2.75 percent and were four basis points higher. 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 0.30 percent for 5/1 adjustable rate mortgages.

Jobless claims fell last week with 787,000 first-time claims filed as compared to 790,000 new claims filed in the prior week. Analysts expected 815,000 initial claim filings. Ongoing jobless claims were also lower with 5.07 million claims filed as compared to the prior week’s reading of 5.20 million continuing jobless claims filed.

Jobs Growth Falls in December; National unemployment Rate Holds Steady

ADP reported 123,000 fewer private-sector jobs n December as compared to 804,000 private-sector jobs added in November. The federal government’s Non-Farm Payrolls report showed similar results for December’s reading on public and private-sector jobs. 140,000 fewer jobs were reported in December as compared to 336,000  public and private-sector jobs added in November. December’s national unemployment rate was unchanged at 6.70 percent. 

What’s Ahead

 This week’s scheduled economic reports include readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be reported.