Last week’s scheduled economic reporting included readings on builder confidence in housing markets, housing starts and building permits issued and sales of previously owned homes. Weekly readings on mortgage rates and first-time jobless claims were also released.

NAHB: Builder Confidence Remains Strong Despite Challenges

February data from the National Association of Home Builders indicated strong builder confidence in housing market conditions overall, but February’s index reading was one point lower at 74. Readings over 50 indicate that most builders have a positive outlook on housing market conditions.

Homebuilder outlook remained positive, although building materials and buildable lots remained costly. Demand for affordable single-family homes was high due to short supplies of existing homes for sale. Homebuyers turned to new homes to find more options. Low mortgage rates and strong job markets contributed to high builder confidence readings.

Housing Starts Fall in January as Building Permits Rise to 13-Year High

Commerce Department data on housing starts showed that the pace of housing starts slipped  3.60 percent from 1.626 million starts in December to 1.567 million starts in January. Housing starts are calculated on a seasonally-adjusted annual basis; analysts said that January’s housing starts were markedly lower after an unexpected rise in housing starts in December 2019.

Building permits rose by 9.60 percent in January with 1.55 million permits issued as compared to 1.420 permits issued in December and an expected annual pace of 1.453 million housing starts for January.

Ongoing shortages of available single-family homes can only be resolved by building more homes, but home builders face obstacles in obtaining necessary zoning  approvals. January’s increase in permits issued is expected to help ease persistently slim inventories of homes for sale.

Sales of previously-owned homes dipped in January due to short supplies of homes for sale and fewer options for would-be home buyers. Pre-owned homes sold at a seasonally-adjusted annual pace of 5.46 million sales as compared to December’s reading of 5.53 million sales.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose two basis points to 3.49 percent; the average rate for 15-year fixed-rate mortgages also rose two basis points to 2.99 percent.

The average rate for 5/1 adjustable rate mortgages fell by three basis points to 3.25 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.80 percent for 15-year fixed-rate mortgages. Discount points averaged 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 210,000 claims filed, which matched expectations. The prior week’s reading showed 206,000 first-time claims filed.

What’s Ahead for the Week of February 24, 2020

This week’s scheduled economic reports include readings on home price trends from Case-Shiller and the Federal Housing Finance Agency and readings on new home sales and consumer sentiment. Weekly readings on mortgage rates and new unemployment claims will also be released.

February 25, 2020  Consumer Confidence    February
February 26, 2020  New Home Sales    January
February 27, 2020  Durable Goods    January
February 27, 2020  GDP 2nd est.        Q4 2019
February 27, 2020  Core PCE Prices    Q4 2019
February 27, 2020  Initial Jobless Claims Week of Feb 17
February 27, 2020  Pending Home Sales    January
February 28, 2020  Personal Income    January
February 28, 2020  Core PCE Price Index    January
February 28, 2020  Chicago PMI  February
February 28, 2020  U of Mich Consumer Sent  February

Have a great week!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
#coloradosmortgageexpert
303.668.3350 Direct

NMLS: 253799 / AnnieMac Home Mortgage NMLS: 338923
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

Last week’s economic news included readings on construction spending and public and private-sector job growth. Weekly readings on mortgage rates and first-time jobless claims were also released.

Construction Spending Dips in December

Overall spending on public and private-sector construction spending dropped by  -0.20 percent in December to an annual rate of $1.33 trillion. Analysts expected spending to increase by 0.10 percent based on November’s revised reading of 0.70 percent growth in construction spending.

Spending on residential construction rose 1.04 percent in December, which is good news for housing shortages in many areas of the U.S. Lower mortgage and interest rates have fueled builder confidence as fears about the impact of tariffs on building materials were diminished.

Chronic short supplies of homes, especially affordable homes, have impacted housing markets in recent years. Builders seeking higher profits have focused on high-end construction as demand increased for entry-level and mid-range homes. Slim supplies of available homes continued to sideline buyers who couldn’t find affordable homes or homes they wanted to buy.

Bidding wars and cash buyers in high-demand markets also add additional pressure to home buyers who depend on mortgage financing. Real estate pros and industry analysts have long said the only way to ease high demand and rapidly rising home prices is for builders to produce more homes at a variety of price points.

Mortgage Rates, New Unemployment Claims Fall

Freddie Mac reported lower fixed mortgage rates for the third consecutive week as the average rate for a 30-year fixed-rate mortgage fell six basis points to 3.45 percent. Rates for 15-year fixed-rate mortgages averaged three basis points lower at 2.97 percent.

Rates for 5/1 adjustable rate mortgages averaged eight basis points higher at 3.32 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable-rate mortgages.

New unemployment claims fell to 202,000 claims filed as compared to 215,000 new claims expected and the prior week’s reading of 217,000 first-time claims filed. The month-to-month reading for first time jobless claims is considered more stable and showed 211,750 new claims filed. The lowest post-recession month-to-month reading of 193,000 new claims filed was posted in April 2019.

Public and Private-Sector Jobs Increase in January

The government’s Non-farm Payrolls report posted 225,000 new public and private-sector jobs in January as compared to December’s reading of 147,000 jobs posted. An average of 211,000 public and private-sector jobs were added in the last three months. ADP reported  291,000 private-sector jobs added in January as compared to 199,000 jobs added in December.

The Commerce Department reported a national unemployment rate of 3.60 percent in January; analysts expected the unemployment rate to hold steady at December’s reading of 3.50 percent.

What’s Ahead for the Week of February 10, 2020

This week’s scheduled economic reporting includes readings on inflation, retail sales and consumer sentiment. Weekly reports on mortgage rates ad first-time jobless claims will also be released.

Tuesday February 11, 2020 JOLTS Job Openings December
Thursday February 13, 2020 Core CPI January
Thursday February 13, 2020 CPI January
Thursday February 13, 2020 Initial Jobless Claims Week of February 3rd
Friday February 14, 2020 Retail Sales January
Friday February 14, 2020 Industrial Production January
Friday February 14, 2020 Capacity Utilization January
Friday February 14, 2020 Business Inventories December
Friday February 14, 2020 U of Mich Consumer Sentiment February

Have a great week!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
#coloradosmortgageexpert
303.668.3350 Direct

NMLS: 253799 / AnnieMac Home Mortgage NMLS: 338923
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

Last week’s economic reports included readings on home prices, new and pending home sales and a statement from the Federal Reserve’s Federal Open Market Committee. The University of Michigan issued its monthly statement on consumer sentiment and weekly reports on mortgage rates and first-time jobless claims were also released.

Case-Shiller: Home Price Growth Picks Up in November

According to Case-Shiller’s National Home Price Index for November, home prices rose by 3.50 percent on a seasonally-adjusted annual basis as compared to October’s reading of 3.20 percent. Case-Shiller’s 20-City Home Price Index showed that home prices for cities included in the Index rose 2.60 percent year-over-year. All 20 cities showed growth in home prices on a month-to-month basis.

Cities with top rates of home price growth have shifted from high-cost coastal metro areas to more moderately priced areas inland and in the South. Phoenix, Arizona reported a reading of 5.90 percent growth in home prices year-over-year and has held first place in the 20-City Home Price Index for six consecutive months.

Charlotte, North Carolina held second place with a year-over-year home price gain of 5.20 percent. Tampa, Florida reported a  5.00 percent gain in home prices and held third place in the 20-City Index.

New Home Sales dipped by 3000 sales in December to a rate of 694,000 sales on a seasonally-adjusted annual basis. December sales of new homes fell short of the expected reading of 735,000 sales according to the Census Bureau and U.S. Department of Housing and Urban Development. The seasonally-adjusted inventory of 327,000 new homes available represented a 5.70 months supply of new homes based on the current sales rate.

In related news, the National Association of Realtors® reported fewer pending home sales in December; all regions reported fewer pending sales in December as compared to November. Pending sales in the Northeast were -4.00 percent lower; pending sales in the Midwestern region fell by -3.60 percent and  December’s spending sales in the South and West were -5.50 percent and -5.40 percent lower respectively.

The steep drop in pending home sales was attributed to slim inventories of available homes, but fewer buyers make offers on homes during the winter holiday season. Pending sales represent homes for which purchase offers have been received but not closed.

The Federal Open Market Committee of the Federal Reserve unanimously voted to hold the Fed’s benchmark interest rate at a range of 1.50 percent to 1.75 percent. Fed Chair Jerome Powell said that current domestic economic conditions were strong, but he also noted potential unrest in global economies due to factors including the outbreak of a highly contagious Asian flu virus.

Mortgage Rates and New Jobless Claims

Freddie Mac reported lower average mortgage rates last week with the rate for 30-year fixed-rate mortgages nine basis points lower at 3.51 percent. Rates for 15-year fixed-rate mortgages averaged four basis points lower at 3.00 percent; interest rates for 5/1 adjustable rate mortgages were four basis points lower at an average of 3.24 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Fewer first-time jobless claims were filed last week; 216,000 new claims were filed as compared to 223,000 claims filed the prior week. The University of Michigan reported that consumer sentiment rose to an index reading of 99.80; analysts expected a reading of 99.10 based on December’s reading of 99.30.

What’s Ahead for the Week of February 3, 2020

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

February 3, 2020  Construction Spending    December
February 3, 2020  ISM Mfg PMI January    
February 4, 2020  Factory Orders December    
February 5, 2020  ADP National Employment January    
February 5, 2020  ISM Non-Mfg PMI January
February 6, 2020  Initial Jobless Claims Week of January 27th
February 7, 2020  Non-Farm Payrolls January    
February 7, 2020  Unemployment Rate January
February 7, 2020  Average Earnings January
February 7, 2020  Wholesale Inventory December

Have a great week!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
#coloradosmortgageexpert
303.668.3350 Direct

NMLS: 253799 / AnnieMac Home Mortgage NMLS: 338923
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.