Last week’s economic reports included readings from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued. Sales of pre-owned homes were reported along with weekly readings on mortgage rates and new jobless claims.

Builder Confidence Slips as Trade Wars Boost Lumber Prices

According to the National Association of Home Builders, home builder confidence in current market conditions was down two points to 68 as compared to May’s index reading of 70. Analysts said that rising lumber prices impacted builder sentiment and have replaced labor costs as builders’ primary expense.

Increased building costs were cited as a concern for builders despite high demand for homes and limited homes for sale. Rising materials costs were attributed to trade wars caused by recent tariffs on lumber.

NAHB said that three components of the Home Builders Housing Market Index were also lower in June. Builder confidence in current market conditions slipped one point to an  index reading of 75; builder confidence in market conditions within the next six months also dropped one point to 76.
Builder confidence in buyer traffic in new housing developments dipped one point to 50. Any reading over 50 indicates more builders than fewer were confident about housing market conditions.

Housing Starts Hit 11-Year High in May

May housing starts surpassed April’s reading of 1.280 million starts on a seasonally-adjusted annual basis. May’s reading of 1.350 million starts also surpassed expectations of 1.300 million starts. Higher volume and faster pace of building homes was good news for real estate and mortgage industry pros, as building more homes is the only way to relieve marked shortages of available homes in many areas.

Rising materials costs could dampen construction pace as tariffs and resulting trade wars increase. May’s reading for housing starts was the highest since 2007 and was 20.00 percent higher year-over-year.

Building permits issued in May were 4.60 percent lower than April’s reading. Building permits were issued at a pace of 1.301 million permits on a seasonally-adjusted annual basis.

Sales of Pre-Owned Homes Slip as Supply Tightens

Previously owned homes sold at a slower pace in May as short supplies of homes constrained already tight markets. The National Association of Realtors® reported 5.43 million sales on a seasonally-adjusted annual basis. Analysts expected a reading of 5.52 million sales based on April’s reading of 5.45 million sales. May sales of previously owned homes were three percent lower year-over-year.

Analysts said that there is little relief in sight and that there is a growing disparity in home sales; sales of homes worth $250,000 or more were up six percent, while sales of homes worth less than $250,000 fell by eight percent. Short supplies of homes for sale encouraged bidding wars and sidelined first-time and moderate-income buyers.

Mortgage Rates, New Jobless Claims Lower
 
Freddie Mac reported lower average mortgage rates last week; the rate for a 30-year fixed rate mortgage dropped five basis points to 4.57 percent; rates for a 15-year fixed mortgage were eight basis points lower at 4.04 percent and rates for 5/1 adjustable rate mortgages were unchanged at an average of 3.83 percent.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and were 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 218,000 claims filed last week as compared to the prior week’s reading of 221,000 new claims filed and expectations of 220,000 new claims.

Buy? Refi? Prequalify.

What‘s Ahead for the Week of June 25, 2018

This week’s scheduled economic releases include Case-Shiller Home Price Indices, new and pending home sales and weekly readings on mortgage rates and new jobless claims.

Monday June 25, 2018

8:30 am Chicago Fed National Activity Index May
10:00 am New Home Sales May

Tuesday, June 26, 2018

9:00 am Case-Shiller US Home Price Index April
10:00 am Consumer Confidence Index June
1:00 pm Raphael Bostic Speech        
1:45 pm Rob Kaplan Speech   
     
Wednesday June 27, 2018

8:30 am Durable Goods Orders May
8:30 am Core Capex Orders May
8:30 am Advance Trade in Goods May
10 am Pending Home Sales May
11 am Randal Quarles Speech        
12:30 pm Eric Rosengren Speech  
      
Thursday June 28, 2019

8:30 am Weekly Jobless Claims
8:30 am GDP Revision Q1
10:45 am James Bullard Speech     
   
Friday June 29, 2018

8:30 am Personal Income May
8:30 am Consumer Spending May
8:30 am Core Inflation May
9:45 am Chicago PMI June
10 am Consumer Sentiment (Final) June

Buy? Refi? Prequalify.
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
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 the post-meeting statement by the Fed’s Federal Open Market Committee along with readings on retail sales and inflation. Weekly reports on mortgage rates and new jobless claims were also released.

Fed Raises Key Interest Rate on Strong Economic Indicators

The post-meeting announcement by the Federal Open Market Committee of the Federal Reserve indicated that committee members voted to raise the target federal funds rate to 0.175 to 2.00 percent from the prior rate of 1.50 to 1.75 percent.

The post-meeting announcement cited strong economic conditions and stated that FOMC had altered their outlook from three rate increases in 2018 to four increases. This news is significant to consumers as banks and credit card companies typically raise lending rates in response to Federal Reserve actions.

Committee members were closely divided on interest rate forecasts for 2018. Eight members said that the Fed rate would likely increase four times in 2018 while seven members said three rate increases would be appropriate. The post-meeting statement also cited concerns over inflation and Fed Chair Jerome Powell said that raising interest rates too fast could increase the risk of recession.

Consumer Price Index, Retail Sales Rise in May

The Consumer Price Index rose from 0.10 percent in April to 0.20 percent in May according to the Commerce Department. The Core CPI, which excludes volatile food and fuel sectors, was unchanged at 0.20 percent against expectations of 0.20 percent growth and 0.20 percent in April.
Retail sales rose 0.80 percent in May as compared to expectations of 0.40 percent growth and April’s growth rate of 0.40 percent. Retail sales excluding the automotive sector rose 0.90 percent in May; analysts expected a reading of 0.50 percent based on April’s reading of 0.40 percent growth.

Mortgage Rates Rise, New Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. The average rate for a 30-year fixed rate mortgage averaged eight basis points higher at 4.60 percent; the average rate for a 15-year fixed rate mortgage rose six basis points to 4.07 percent.
Rates for a 5/1 adjustable rate mortgage were nine basis points higher at 3.83 percent on average. Freddie Mac analysts said that demand for homes is holding steady despite higher mortgage rates.
First-time jobless claims fell by 4,000 new claims to 218,000 new claims filed. Analysts expected 225,000 new claims to be filed based on the prior week’s reading of 222,000 new jobless claims filed.

Buy? Refi? Prequalify.

What‘s Ahead for the Week of June 18, 2018

This week’s scheduled economic reports include NAHB Housing Market Indices, Commerce Department readings on housing starts and building permits issued and National Association of Realtors® reports on sales of previously-owned homes. Weekly readings on mortgage rates and new jobless claims will also be released.

Monday  June 18, 2018

10:00 am NAHB Home Builders' Index
1:00 pm Raphael Bostic Speech 
   
Tuesday June 19,2018

7:00 am James Bullard Speech        
8:30 am Housing Starts May
8:30 am Building Permits May

Wednesday June 20, 2018

8:30 am Current Account Q1
9:30 am Jerome Powell Panel Discussion        
10 am Existing Home Sales May

Thursday June 21, 2018

8:30 am Weekly Jobless Claims
8:30 am Philly Fed June
9:00 am Neel Kashkari Speech        
10:00 am Leading Indicators May

Friday June 22, 2018

9:45 am Markit Manufacturing PMI June
9:45 am Markit Services PMI June

Buy? Refi? Prequalify.
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
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 analyst assertions that U.S. housing markets are overvalued in over 50 percent of markets. Weekly reports on mortgage rates and first-time jobless claims were also released.
 
CoreLogic: Over Half of Top 50 U.S. Housing Markets Overvalued
 
Rapidly rising home prices are causing some U.S. markets to be overvalued, which means that home prices are higher than a community’s ability to sustain. What goes up must come down in such scenarios, but home prices continue to grow in many areas.
 
While Boston, Massachusetts and San Francisco, California continued to see rapidly rising home prices, analysts said that residents of the two cities had incomes sufficient to meet the cost of homes. Examples of cities where home prices were overvalued in April included Los Angeles, California, Denver, Colorado and Washington, D.C. Supplies of available homes have fallen over the last three years.  Real estate pros and analysts continue to cite building more homes is the only solution to the shortage.
 
The National Association of Realtors® said that although supplies of new homes have increased in recent months, most newly built homes are priced for move-up buyers. Moderate-income and first-time buyers haven’t seen much improvement in available affordable homes. Rising mortgage rates in recent months also presented an obstacle to finding affordable homes.
 
Mortgage Rates, New Jobless Claims Fall
 
Freddie Mac reported lower average mortgage rates last week. Rates for a 30-year fixed rate mortgage fell two basis points to 4.54 percent; rates for a 15-year fixed rate mortgage were five basis points lower at an average rate of 4.01 percent. Rates for a 5/1 adjustable rate mortgage averaged 3.74 percent and were six basis points lower. Discount points for 30-year fixed rate mortgages averaged 0.50 percent; discount points for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages averaged 0.40 percent.
 
First-time jobless claims fell last week despite predictions that they would rise. 222,000 new claims were filed as compared to expectations of 225,000 new claims and the prior week’s reading of 223,000 new claims.

Buy? Refi? Prequalify.
 
What’s Ahead for the Week of June 11, 2018
 
This week’s scheduled economic releases include the post-meeting statement from the Federal Reserve’s Federal Open Market Committee, readings on consumer prices and retail sales. Mortgage rates and new jobless claims will also be released.

Monday June 11, 2018

11:00 am Survey of Consumer Expectations        

Tuesday June 12, 2018

6:00 am NFIB Small-Business Index May
8:30 am Consumer Price Index May
8:30 am Core CPI May
2:00 pm Federal Budget May      
 
Wednesday June 13, 2018

8:30 am Producer Price Index May  
2:00 pm FOMC Announcement       
2:30 pm Jerome Powell Press Conference
        
Thursday June 14, 2018

8:30 am Weekly Jobless Claims  
8:30 am Retail Sales May
8:30 am Retail Sales Ex-Autos May
8:30 am Import Price Index May
10 am Business Inventories April

Friday June 15, 2018

8:30 am Empire State Index June
9:15 am Industrial Production May
9:15 am Capacity Utilization May
10:00 am Consumer Sentiment Index June

Buy? Refi? Prequalify.
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
AnnieMac Home Mortgage
Colorado's Mortgage Expert
www.coloradosmortgageexpert.com
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 Case-Shiller home prices, pending home sales and construction spending. Weekly readings on mortgage rates and new jobless claims were released, along with monthly labor-related reports on job creation and the national unemployment rate.
 
Case-Shiller: Home Prices Maintain Rapid Growth
 
S&P Case-Shiller home price indices for March showed home prices continued to grow at blazing rates. Seattle, Washington held on to first place with a seasonally-adjusted annual rate of 13.00 percent; Las Vegas, Nevada reported 12.40 percent growth in home prices in March.
 

Analysts said Las Vegas markets benefitted from homebuyers relocating from high-priced coastal areas. Las Vegas home prices were 25 percent below their housing bubble peak. San Francisco reported year-over-year home price growth of 11.40 percent
 
Home prices were driven by short supplies of homes for sale and high demand among buyers, which led to bidding wars in high-demand areas. Rapidly rising home prices sideline first-time and moderate-income buyers who face hurdles of affordability and strict mortgage approval requirements.
 
While real estate pros and economic analysts expected home price growth to reach a tipping point where demand for homes would slow down, it hasn’t happened yet. Strong economic conditions and jobs data provided first-time buyers incentives to transition from renting to owning.
 
Pending Home Sales Slow in April
 
Pending home sales, which are sales under contract but not yet closed, dropped by -1.30 percent in April as compared to the March reading of 0.60 percent. Severe winter weather contributed to the lag, but analysts said severe shortages if available homes squeezed would-be buyers to the sidelines as they waited for more buying options. The National Association of Realtors® said that April’s reading was the third consecutive month of lower pending home sales. 
 
Construction spending rose by 1.80 percent in April and surpassed expectations of a one percent increase and the negative March reading of -1.70 percent. This could be a hopeful sign if accelerated spending is due to growing construction projects, but ongoing concerns over increased materials and labor costs may have contributed to builders’ cash outlay.
 
Mortgage Rates, Weekly Jobless Claims Fall
 
Mortgage rates eased last week, with average rates lower across the board. Freddie Mac reported the rate for a 30-year fixed rate mortgage fell by 10 basis points to 4.56 percent. The average rate for a 15-year fixed rate mortgage was nine basis points lower at 4.06 percent; rates for 5/1 adjustable rate mortgages averaged 3.80 percent and were seven basis points lower. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
 
First-time jobless claims fell last week to 221,000 claims filed. Analysts expected 225,000 new claims filed based on the prior week’s reading of 234,000 new claims filed. May payroll reports supported stronger labor markets as ADP reported 178,000 jobs added as compared to 163,000 private-sector jobs added in April. Non-farm payrolls, which measure private and public-sector job growth, rose by 223,000 jobs in May as compared to 159,000 jobs added in April. The highlight of May labor reports was an 18-year low of 3.80 percent national unemployment rate for May.

Buy? Refi? Prequalify.
 
What‘s Ahead for the week of June 4, 2018
 
This week’s scheduled economic reports include readings on job openings, mortgage rates and new jobless claims.

Monday June 4, 2018

10:00 am Factory Orders April

Tuesday June 5, 2018

10:00 am ISM Non-Manufacturing Index May
10:00 am Job Openings April

Wednesday June 6, 2018

8:30 am Trade Deficit April
8:30 am Productivity
8:30 am Unit Labor Costs

Thursday June 7, 2018

8:30 am Weekly Jobless Claims
10:00 am Quarterly Services Q1      
3:00 pm Consumer Credit April

Friday June 8, 2018

10:00 am Wholesale Inventories April

Buy? Refi? Prequalify.
Get the Insider Track on Interest Rates!

Cheers!

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