Last week’s economic news included readings on sales of new and previously-owned homes along with final March index readings on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.
Sales of New and Pre-Owned Homes Fall in February
Weather-related problems disrupted sales of new and previously-owned homes in February as low inventories of homes for sale further stalled sales. The National Association of Realtors® said that sales of new and pre-owned homes were slowed by persistent shortages of homes on the market.
Shortages of available homes were common before the pandemic and are more pronounced now. Realtor.com estimates that 200,000 homeowners stayed out of the market in the past year; this contributed to the two-month supply of homes available in February. Real estate professionals consider a six-month supply of homes for sale to indicate a balanced market. Sales of previously-owned homes were 9.10 percent higher in February 2020.
High demand for homes fueled competition among buyers and drove home prices higher. Rising mortgage rates, short supplies of homes, and rising home prices presented obstacles for first-time and moderate-income home buyers as the national median price for previously-owned homes reached $313,000.
New homes sold at a seasonally-adjusted annual pace of 775,000 sales in February according to the Census Department and was 18.20 percent lower than the reading of 948,000 new home sales reported in January. The inventory of new homes available rose to a 4.80 month supply as buyers were sidelined by winter weather and rising mortgage rates. Analysts expect high demand for new homes to continue as buyers move out of crowded urban areas and seek larger homes that meet increasing needs for work-at-home space and up-to-date technology.
Mortgage Rates Rise as Jobless Claims Fall
Freddie Mac reported higher average mortgage rates last week as rates for 30-year fixed-rate mortgages jumped eight basis points to 3.17 percent; the average rate for 15-year fixed-rate mortgages rose five basis points to 2.45 percent and the average rate for 5/1 adjustable-rate mortgages rose five basis points to 2.84 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 0.20 percent.
New jobless claims fell to 684,000 claims from the prior week’s reading of 781,000 first-time jobless claims. Ongoing claims were also lower with 3.87 million continuing claims filed as compared to the previous week’s reading of 4.13 million continuing claims filed.
The University of Michigan reported an index reading of 89.1 for its Consumer Sentiment Index in March. February’s reading was 83.0 and analysts expected an index reading of 83.7.
What’s Ahead
This week’s economic reporting includes readings from Case-Shiller Home Price Index and reporting on pending home sales. Private and public sector job growth and the national unemployment rate will be released along with weekly reports on mortgage rates and jobless claims.
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 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, the post-meeting statement from the Fed’s Federal Open Market Committee, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.
Inflation Ticks Up in May
May’s Consumer Price Index moved from April’s reading of -0.80 percent to -0.10 percent. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose to -0.40 percent in May as compared to April’s reading of -0.40 percent. The Consumer Price Indices are used to calculate overall and core inflation rates. The Federal Reserve uses an annual inflation rate of 2.00 percent as an indicator for achieving price stabilization.
The Federal Open Market Committee of the Federal Reserve said in its post-meeting statement that the Fed would do all it can to ease the economic downturn caused by the Coronavirus and left the current federal funds rate of 0.00 to 0.25 percent unchanged. Fed Chair Jerome Powell indirectly encouraged legislators to approve funding for additional coronavirus relief.
Mortgage Rates Remain Stable as Jobless Claims Fall
Freddie Mac reported little change in average mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 3.21 percent. Rates for 15-year fixed-rate mortgages averaged 2.62 percent and were unchanged from the previous week. The average rate for 5/1 adjustable rate mortgages was also unchanged at 3.10 percent. Average discount points rose to 0.90 percent and 0.80 percent for 30-year fixed-rate mortgages and 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.
Jobless claims remained far higher than pre-coronavirus levels but were lower last week than for the prior week. 1.54 million first-time jobless claims were filed as compared to 1.90 million claims filed the previous week. 29.50 million continuing jobless claims were filed last week as compared to the prior week’s reading of 30.20 million continuing unemployment claims.
The University of Michigan reported a higher index reading for consumer sentiment in May with a reading of 87.8 as compared to April’s index reading of 82.3.
What’s Ahead
This week’s scheduled economic reports include the National Association of Home Builders Housing Market Index and Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and unemployment claims will also be released.
Last week’s economic news included readings on construction spending and labor reports on public and private sector jobs and the national unemployment rate. Weekly readings on mortgage rates and first-time jobless claims were also released.
Construction Spending Falls in April
The Commerce Department reported lower than expected deficits in consumer spending in April. Construction spending fell by -2.90 percent from the March reading of 0.00 percent growth in spending; analysts expected 6.80 percent less construction spending for April due to the Coronavirus pandemic.
Additional declines in construction spending are expected for May and June as impacts of the Coronavirus and uncertain economic conditions lessen demand for homes. Residential construction spending fell by 4.50 percent in May.
Mortgage Rates Mixed as Initial Jobless Claims Fall
Freddie Mac reported higher rates for 3-year fixed-rate mortgages, which increased an average of three basis points to 3.18 percent. Rates for 15-year fixed-rate mortgages were unchanged at an average of 2.62 percent. Rates for 5/1 adjustable rate mortgages fell by three basis points to an average rate of 3.10 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable-rate mortgages.
First-time jobless claims fell last week but were much higher than readings reported before the coronavirus outbreak. States reported 1.88 million new jobless claims, which exceeded expectations of 1.81 million new claims and fell short of the prior week’s reading of 2.13 million initial jobless claims.
2.23 million initial jobless claims were filed last week including claims made under federal programs. 3.21 million total jobless claims were filed the prior week.
Jobs Reports Show Mixed Results In May
ADP reported -2.76 million private-sector jobs lost on a seasonally-adjusted annual basis as compared to April’s reading of -19.60 million jobs lost. The government’s Nonfarm Payrolls report showed 2.50 million more public and private-sector jobs than were reported in April.
Analysts expected -7.25 million fewer public and private sector jobs in May as compared to April’s reading of -20.70 million jobs lost.
The national unemployment rate dipped from April’s rate of 14.70 percent to 13.30 percent in May. Analysts expected the national unemployment rate to reach 19.00 percent in May.
Lower unemployment readings suggest that the economy is recovering at a faster pace than originally estimated, but recent civil unrest may cause another wave of coronavirus cases as protesters failed to observe social distancing protocols.
What’s Ahead
This week’s scheduled economic reports include readings on inflation and consumer sentiment. The Federal Reserve’s Federal Open Market Committee is set to meet next week, but this meeting may be canceled due to the Coronavirus pandemic.
Last week’s economic reports included monthly readings from Case-Shiller Home Price Indices, FHFA home prices, and readings on new and pending home sales. Weekly reports on mortgage rates and first-time jobless claims were also released.
Case-Shiller Home Price Indices: Home Price Growth Pace Increased In March
National home prices rose at a year-over-year pace of 4.50 percent in March from February’s reading of 4.20 percent. According to the Case-Shiller 20-City Home Price Index, home prices rose by 0.40 percent to a year-over-year growth rate of 3.90 percent.
The three cities reporting the highest rates of home price growth year-over-year were Phoenix, Arizona with 8.20 percent year-over-year growth; Seattle, Washington reported year-over-year home prices growth of 6.90 percent. Charlotte, North Carolina reported 5.80 percent home price growth.
Analysts said that Seattle home prices rose despite the Seattle metro area having a large outbreak of Covid-19 in the first weeks of the pandemic. April readings on home price growth are expected to dip into negative readings reflecting the spread of the coronavirus and its increasing impact.
17 of 19 cities reported in the 20-City Home Price Index for March had higher growth rates than in February; the Detroit metro area did not report data for the March 20-City Home Price Index.
The FHFA Home Price Index reported 5.90 percent year-over-year home price growth for March as compared to its February reading of 6.10 percent home price growth. FHFA reports on home sales connected with properties that have mortgages owned by Fannie Mae and Freddie Mac.
New Home Sales Increase in April as Pending Home Sales Fall
Sales of new homes rose in April although many areas were under stay-at-home orders related to the coronavirus pandemic. 623,000 new home sales were reported on a seasonally-adjusted annual basis as compared to the March reading of 619,000 sales of new homes. Pending home sales were -21.80 percent lower as compared to the March reading of -20.80 percent. Fewer pending home sales reflected impacts of the pandemic as government agencies issued stay-at-home orders and citizens faced financial uncertainty and health concerns.
Mortgage Rates, New Jobless Claims Fall
Freddie Mac reported lower mortgage rates last week; rates for 30-year fixed-rate mortgages were nine basis points lower at an average rate of 3.13 percent. Rates for 15-year fixed-rate mortgages averaged eight basis points lower at 2.62 percent and rates for 5/1 adjustable rate mortgages averaged 3.13 percent and were four basis points lower. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points averaged 0.40 percent for 5/1 adjustable rate mortgages.
New jobless claims were lower at 2.12 million claims filed as compared to the prior week’s reading of 2.45 million initial jobless claims filed. While fewer claims filed is good news, readings for initial jobless claims far exceeded typical numbers of new jobless claims filed before the pandemic.
What’s Ahead
This week’s scheduled economic reports include readings on construction spending and labor sector reports on public and private sector jobs and the national unemployment rate. Weekly reports on mortgage rates and new jobless claims will also be released.
Last week’s economic news included readings from the National Association of Home Builders on housing market conditions and reports on housing starts and building permits issued.
Fed Chair Jerome Powell testified before Congress about the impact of Covid-19. Weekly reports on mortgage rates and first-time jobless claims were also released.
NAHB: Home Builder Confidence Improves in May
Home-builder confidence rose seven points in May to an index reading of 37; April’s reading of 30 was the lowest reading for the NAHB Housing Market Index since June 2012. Low mortgage rates and expectations that the worst of the Covid-19 pandemic had passed contributed to higher readings for builder confidence.
Component readings in the Housing Market Index were higher in May; builder confidence in current market conditions rose six points to 42.
Builder confidence in home sales within the next six months rose ten points to 46, and the reading for buyer traffic in new housing developments rose from 13 to 21. Readings below 50 are historically common for buyer traffic, but mandatory shelter-at-home rules kept more potential buyers away.
NAHB Housing Market Index readings above 50 indicate that most builders surveyed were positive about U.S. housing markets. Readings below 50 indicate that most builders surveyed were pessimistic about housing conditions.
Fed Chair Urges Congress to Help Pandemic Victims
Fed Chair Jerome Powell testified before Congress and said that those impacted by Covide-19 should receive as much assistance as possible. While Congress approved Federal Reserve Loans to mid-to-large businesses, Mr. Powell reminded Congress that they must also do as much as possible to help low to moderate-income families and businesses and cited a Federal Reserve study that reported 40 percent of households making less than $40,000 lost a job within the first month of the pandemic.
Sales of Pre-Owned Homes, Housing Starts, and Building Permits Issued Fall in April
The Commerce reported lower readings for sales of pre-owned homes, housing starts, and building permits issued in April. Sales of previously owned homes fell to a seasonally-adjusted annual pace of 4.33 million sales as compared to the March reading of 5.27 million sales.
Housing Starts fell to an annual pace of 891,000 starts in April as compared to 1.276 million starts reported in March. The Commerce Department reported 1.074 million building permits issued on an annual basis; this reading was also lower than the March reading of 1.356 million permits issued but was higher than the expected reading of 996,000 permits issued.
Mortgage Rates Fall as New Jobless Claims Rise
Freddie Mac reported lower mortgage rates last week; the average rate for 30-year fixed-rate mortgages was four basis points lower at 3.24 percent. Rates for 15-year fixed-rate mortgages averaged 2.70 percent and were two basis points lower than for the prior week.
Rates for 5/1 adjustable rate mortgages averaged 3.17 percent and were four basis points lower. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent f04 5/1 adjustable rate mortgages.
New jobless claims reported by states fell to 2.44 million claims filed as compared to the prior week’s reading of 2.69 million initial claims filed. The reading for state and federal jobless claims filed rose from 3.21 million to 3.30 million as applicants applied for additional jobless benefits offered through federal pandemic relief programs.
What’s Ahead
This week’s scheduled economic readings include Case-Shiller’s Home Price Indices, the FHFA Home Price Index, and data on new home sales. Monthly readings on inflation and consumer sentiment are scheduled along with weekly readings on mortgage rates and new jobless claims.
Last week’s economic news included readings on inflation, retail sales, and a speech by Federal Reserve Chair Jerome Powell. The University of Michigan released a preliminary reading of its Consumer Sentiment Survey; weekly readings on mortgage rates and initial jobless claims were also released.
April Inflation and Retail Sales in Negative Territory
Consumer prices fell in April to a negative reading of -0.80 percent and matched expectations. The Core Consumer Price Index, which excludes volatile food and energy sectors, fell to -0.40 percent from -0.10 percent in March. Analysts expected a reading of -0.20 percent. Consumer Price Indices are used for determining inflation rates.
Retail sales also posted negative readings for April. Overall, retail sales fell by -16.40 percent as compared to the March reading of -8.30 percent and April’s expected reading of -12.50 percent. Retail sales excluding autos fell by 17.20 percent; analysts expected a reading of -0.90 percent based on the March reading of -0.40 percent. Retail readings may improve in May as retail establishments and malls start to open.
Fed Chair Expects Slow Economic Recovery
Jerome Powell, Chairman of the Federal Reserve advised business contacts that the economic recovery may be slower than originally expected. In remarks given at the Peterson Institute for International Economics, Mr. Powell said, “The path ahead is both highly uncertain and subject to significant downside risks.” Mr. Powell cautioned that “the passage of time can turn liquidity problems into solvency problem” and suggested that additional government assistance to households and businesses may be worth it to prevent more damage to the economy.
Mortgage Rates Mixed; New Jobless Claims Fall
Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-fixed rate mortgages averaged two basis points higher at 3.28 percent. Rates for 15-year fixed-rate mortgages dropped by one basis point to 2.72 percent. Rates for 5/1 adjustable rate mortgages averaged one basis point higher at 3.18 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
New jobless claims were lower than in the prior week but remained far above traditional readings. 2.98 million claims were filed as compared to the prior week’s reading of 3.18 million initial claims filed. Analysts expected a reading of 2.73 million new claims filed.
The University of Michigan released its preliminary Consumer Sentiment Index readings for May. The latest index reading was 73.70 as compared to an expected reading of 69.80 and last month’s reading of 71.80. May’s reading was in line with Chair Powell’s suggestion that consumers are looking ahead to returning to work and shopping as the economy gradually reopens.
What’s Ahead
This week’s economic reporting includes readings from the National Association of Home Builders on housing market conditions along with reports on housing starts and building permits issued. Data on existing home sales and weekly readings on mortgage rates and new jobless claims will also be released.
Last week’s economic releases included readings on public and private sector employment, the national unemployment rate.
Economic Destruction Continues as Coronavirus Spreads
ADP reported 20.2 million private-sector jobs lost in April as compared to 149,000 jobs lost in March. The government’s Non-Farm Payrolls report showed -20.5 million public and private-sector jobs lost in April as compared to -870,000 jobs lost in March. Both of these jobs reports typically show job growth, but they now report jobs lost due to the coronavirus pandemic and efforts to control it.
Likewise, the national unemployment rate grew in April to 14.70 percent as compared to the normal reading of 4.40 percent in March.
Mortgage Rates Mixed as New Jobless Claims Fall
Freddie Mac reported higher average mortgage rates for 30-year fixed-rate mortgages, which were three basis points higher at 3.26 percent. The average rate for 15-year fixed-rate mortgages fell by four basis points to 2.73 percent. Rates for 5/1 adjustable rate mortgages rose by three basis points to 3.17 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 fell to 3.17 million claims, which exceeded expectations of 3.10 million new claims filed. While new jobless claims were lower than the prior week’s reading of 3.85 million initial unemployment claims, the millions of claims filed were far above normal readings in the hundred-thousands. While jobless claims remain high, they are lower than the seasonally-adjusted peak of 6.90 million initial claims filed in March.
Analysts said that unemployment figures would increase as small business claims increase.
Credit Card Use Falls In March
Consumers stopped using credit cards in March as the coronavirus took hold and the economic shut-down limited shopping, travel, and dining out. Credit card companies tightened lending standards and reduced credit lines as unemployment rates rose. Credit card use fell by nearly 31 percent to - $28.20 billion in March; installment loans including education and vehicle loans rose by 6.20 percent to $16.1 billion.
Auto dealers offering attractive incentives including low to no interest rates encouraged consumers to purchase vehicles. Home loans were not counted in the reading for installment loans.
What’s Ahead
This week’s scheduled economic releases include readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and new 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.
