mortgage rates Category
Mortgage rates rose last week with average rates a 30-year fixed rate mortgage rising from last week’s 3.35 percent to 3.42 percent with buyers paying all closing costs and 0.7 percent in discount points.
Average rates for a 15-year fixed rate mortgage rose from 2.56 percent to 2.61 percent with buyers paying their closing costs and 0.7 percent in discount points.
Freddie Mac also reports that average rates for a 5/1 adjustable rate mortgage rose from 2.56 percent last week to 2.58 percent with buyers paying their closing costs and 0.5 percent in discount points.
Here are noteworthy points from last week’s economic news:
Monday: In spite of improving economic conditions, a majority of participants in the Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that their lending institutions would not be relaxing residential mortgage lending standards. Lenders perceive a significant risk in terms of being required to absorb losses incurred on defaulted mortgage loans.
Mortgage owners including Fannie Mae and Freddie Mac, along with mortgage insurance companies can require mortgage lenders to buy back defaulted loans or make them whole for losses related to foreclosed and otherwise defaulted mortgage loans.
Tuesday: CoreLogic reported an increase of 1.9 percent in national home prices for March. This news represents the 13th consecutive increase and a year-over-year increase of 10.5 percent.
Home prices were boosted by strong increases in the West; Nevada posted a 22.2 percent gain from last March and California posted a 17.2 percent year-over-year gain.
CoreLogic predicted a year-over-year increase of 9.6 percent for home prices for April, with a monthly increase of 1.3 percent increase expected between March and April.
Thursday: Weekly jobless claims brought good news as they came in at 323,000; this was lower than expectations of 335,000 new jobless claims and the 327,000 new jobless claims reported in the prior week.
Friday: The Treasury Department reported that the federal budget has a surplus of + $113 billion for April. This was $54 billion higher than for April 2012 and the highest monthly surplus since April, 2008.
Increasing home values and federal budget surpluses, along with falling consumer debt pointed the way toward overall as well as personal economic recovery last week.
What‘s Coming Up
This week brings a couple important economic reports affecting the real estate industry including the Home Builders Index on Wednesday and the Weekly Jobless Claims and Housing Starts numbers released on Thursday.
The Consumer Sentiment and Leading Indicators reports will round out the week on Friday. Consumer Sentiment is important in terms of housing markets and mortgage lending; consumers typically don’t buy homes or move up to a larger home if they aren’t feeling secure about economic conditions.
This week’s economic data may provide further evidence of a stronger U.S. economy as well as a snapshot of retail spending and consumer costs.
Mortgage rates fell last week and approached or reached record low levels.
According to Freddie Mac, the average rate for a 30-year fixed rate mortgage (FRM) fell from 3.40 percent to 3.35 percent. Average rates for a 15-year FRM moved from 2.61percent to 2.56 percent.
Average rates for a 5/1 adjustable rate mortgage (ARM) fell to 2.56 from last week’s average of 2.58 percent Discount points for last week’s mortgage rates ranged from 0.7percent for 30 and 15 year FRM loans to 0.5 percent for a 5/1 ARM.
Rock-bottom mortgage rates can offset the impact of rising home prices.
Last Week Was A Strong Showing For The US Economy
Last week’s economic news provided further indications of economic recovery, with housing related reports contributing to overall confidence in a stronger economy.
Highlights of last week’s news include:
Monday: Pending home sales moved up to 1.50 percent in March from February’s -1.07 percent. This reading also surpassed Wall Street’s forecast of 0.90 percent for March.
Tuesday: The Case-Shiller Home Price Index for February reported that the national average home price had increased by 9.3 percent year-over-year between February 2012 and February 2013. By comparison, the average national home price between January 2012 and January 2013 increased by 8.1 percent year-over-year. Rising home prices are contributing to the economic recovery, but in some areas demand for homes exceeds supply, which also contributes to rising home prices.
Wednesday: The Federal Open Market Committee (FOMC) issued its scheduled statement after its meeting concluded. Committee members noted signs of an improving economy, and cited housing markets as a leading contributor to the recovery. The FOMC statement also indicated that economic conditions were not sufficiently improved for the FOMC to change or cease the Federal Reserve’s quantitative easing policy. The Fed’s goal for its current quantitative easing program is keeping long-term interest rates including mortgage rates low.
Thursday: The weekly Jobless Claims Report brought better-than-expected news with new jobless claims coming in at 324,000, less than the expected reading of 345,000 new jobless claims and also higher than the previous report’s reading of 342,000 new jobless claims.
Friday: The Bureau of Labor Statistics issued its monthly “Jobs Report,” which consists of the Non-farm Payrolls Report and the national Unemployment Rate. Again new jobs added exceeded expectations for April with 165,000 jobs added against expectations of 135,000 new jobs added. April’s reading also surpassed the March reading of 138,000 new jobs.
The unemployment rate dropped to 7.5 percent as compared to a consensus of 7.6 percent and last month’s reading of 7.6 percent. To put this reading in perspective, the FOMC has targeted an unemployment rate of 6.5 percent as a benchmark for adjusting its current policies including quantitative easing.
What To Look For This Week
This week’s economic events include latest Jobless Claims report on Thursday. It will be interesting to see if this week’s reading will be lower than last week’s reading of 324,000 new jobless claims.
On Friday, the Federal Budget will be released; this could influence financial markets depending on what programs and services are cut or reduced.
Mortgage rates fell again last week and are again near record lows.
According to Freddie Mac, the average rate for a 15-year fixed rate mortgage did achieve a record low of 2.61 percent as compared to 3.1 percent one year ago.
The average rate for a 30-year fixed rate mortgage fell to 3.40 percent and near the record low of 3.31 percent.
Low mortgage rates are helping homeowners with refinancing and are boosting housing markets as more buyers can qualify for mortgage loans.
Home Values Continue To Rise
Last week’s economic news was mixed; The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, released its Home Price Index for February.
According to this index, home prices increased by 0.7 percent between January and February, and increased by 7.1 percent year-over-year on a seasonally adjusted annual basis.
According to the National Association of REALTORS®, existing home sales for March fell short of the expected 5.03 million and came in at 4.92 million existing homes sold on a seasonally adjusted annual basis.
This reading was also 0.7 percent shy of February’s reading of 4.95 million existing homes sold.
Some homeowners may be taking a wait-and-see stance as they wait for home values to continue rising.
Employment Numbers Gaining Steam
Weekly jobless claims fell to 339,000 and were short of the consensus of 351,000 and the prior week’s 355,000 jobless claims filed.
As more workers gain employment, those able to buy homes increases.
The economy in general also benefits as households gain income they can use for purchasing goods and services.
Consumer Sentiment rose by 2.1 points to 76.4 over the March reading of 72.3 percent.
April’s reading also surpassed expectations of 74.0 percent.
As consumers gain confidence in the economy, they are generally more likely to buy homes and make other major purchases that contribute to the U.S. economy.
Coming Up this Week
This week’s economic news calendar includes several reports that impact the housing sector as well as the general economy:
- Monday: Personal Income, Consumer Spending and Pending Home Sales reports are due for release.
- Tuesday: The Case Shiller/Wells Fargo Home Price Index for February and Consumer Confidence for April will provide data concerning national and regional home prices and indicate how consumers view the economy.
- Wednesday: The customary statement by the Federal Open Market Committee (FOMC) is set for release at the conclusion of its meeting. The ADP Employment Index for April and Construction Spending for March provide data on jobs and trends in construction spending.
- Thursday: Weekly Jobless Claims report
- Friday: The Non-farm Payrolls Report and Unemployment Rate for April, collectively known as the Jobs Report, will be released.
While we can’t predict what will happen with mortgage rates, some industry analysts indicated that they expect rates to remain low in the near-term.
These lower rates should continue to support growth in the Broomfield real estate market for home buyers and sellers as well as those looking to refinance their home.
U.S. Budget Stalemate, Italian Elections Stir Concerns
Mortgage rates were lower last week as investors sought safety in bonds in the wake of US legislators’ failure to agree on budget cutbacks, and after Italy’s elections failed to reveal a leader committed to continuing economic reform.
When bond prices including Mortgage Backed Securities rise, mortgage rates typically fall.
While the March 1st deadline for passing budget cutbacks for the U.S. government passed without a resolution, emergency legislation passed last year will keep the government running until March 27.
If a budget is not passed by then, the federal government could face shutdown.
As it stands, $85 billion in cuts are scheduled over the next seven months, but this represents only about 2 percent of the federal budget.
Investor concerns are likely to rise if the March 27 deadline approaches without a resolution.
Italian Elections Influence Investor Sentiment
On Monday, Italian elections were held, but the results did not reveal a leader dedicated to continuing economic reforms necessary for stabilizing Italy’s economy.
Another round of elections may be required to determine Italy’s new leader.
There is deep conflict in Italy as citizens do not agree with the need for economic austerity measures.
As the Eurozone’s third largest economy, Italy’s division on future economic reforms raises two concerns for investors.
First, without a clear reform leader established in last week’s elections, Investors fear that austerity measures may be relaxed and increase Italy’s debt risk.
A less likely risk is that Italy may leave the EU if it cannot resolve its need for economic reforms with its citizens’ wishes.
Upcoming Economic Releases
The coming week’s scheduled economic releases include:
- Ongoing developments regarding the U.S. budget and aftermath of the Italian elections are expected to continue influencing U.S. financial markets.
- On Tuesday ISM Services Index for February will be released. Wednesday’s news includes the Fed’s Beige Book Report for March and Factory Orders for January.
- Thursday’s scheduled economic news releases include Productivity and Trade Balance reports. Friday finishes the week’s economic news with the Employment report, which includes job and unemployment data for February.
As spring approaches, demand for homes typically increases, which in turn may drive up home prices and mortgage rates.
Consider getting pre-approved for a mortgage and looking for your new home sooner than later.
A quiet past week in economic news caused mortgage rates to worsen slightly.
This week, however, will be packed with economic reports which may have an impact on interest rates going forward.
Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose by 3 basis points from 3.53 percent to 3.56 percent with borrowers paying 0.8 in discount points and all of their closing costs.
The average rate for a 15-year fixed rate mortgage was unchanged from last week at 2.77 percent with borrowers paying 0.8 in discount points and all of their closing costs.
In other economic news, the Consumer Price Index (CPI) for January fell slightly to 0.0 percent as compared to Wall Street expectations of 0.1 percent and December’s reading of 0.1 percent.
The Core CPI, which measures consumer prices exclusive of volatile food and energy sectors, was 0.3 percent for January and surpassed analyst expectations of 0.2 percent and December’s reading of 0.1 percent.
Inflation Remains Low
These readings remain well below the 2.5 percent inflation level cited by the Fed as cause for concern.
According to the Department of Commerce, Housing Starts for January fell to 890,000 from December’s 954,000 and below Wall Street projections of 910,000.
These seasonally adjusted and annualized numbers are obtained from a sample of 844 builders selected from 17,000 newly permitted building sites.
Falling construction rates could further affect low supplies of homes reported in some areas; as demand for homes increase, home prices and mortgage rates can be expected to rise.
Full Economic Calendar This Week
This week’s economic news schedule is full; Treasury auctions are scheduled for Monday, Tuesday and Wednesday. New Home Sales will be released Tuesday.
Fed Chairman Ben Bernanke is set to testify before Congress on Tuesday and Wednesday.
Wednesday’s news includes the Pending Home Sales Index and Durable Orders.
Thursday’s news includes the preliminary GDP report for Q4 2012, the Chicago Purchasing Managers Index, and weekly jobless claims.
Friday brings Personal Income and Core Personal Expenditures (CPE).
Consumer Sentiment, the ISM Index and Construction Spending round out the week’s economic news.
Mortgage rates worsened last week in response to more indications that the U.S. economy and global economic trends are improving. Global economic data was stronger than expected; which generally boosts investor confidence and leads to higher mortgage rates in Colorado and across the country.
According to Freddie Mac, the average rate for a 30-year fixed rate mortgage was 3.53 percent with borrowers paying all of their closing costs and 0.8 percent in discount points along with a full complement of closing costs.
The U.S Department of Commerce reported that Factory Orders for December improved over November; they rose from 0.0 percent in November to 1.89 percent in December, but fell short of Wall Street’s expectation of 2.5 percent.
The ISM Services Index for January was released Tuesday and fell to 55.2 from December’s reading of 56.1 and was slightly higher than against investors’ expectations of 55.0. Readings above 50 indicate expansion of the service sector of the economy. The ISM Services Index is also an indicator of future inflationary pressure.
Homebuilders Say Markets Improve For 6th Consecutive Month
On Wednesday, the National Association of Home Builders (NAHB) released its NAHB/First American Improving Markets Index (IMI), which provided good news for housing markets in all 50 states and Washington, D. C. Metro housing markets surveyed showed expansion of improving markets for the sixth consecutive month.
259 of the 361 metro areas surveyed in the IMI showed improvement in February. By comparison, only 12 improving metro markets were reported for September of 2011.
Increasing home prices and mortgage rates suggest that now may be the time for buying a home.
The weekly Jobless Claims report released on Thursday indicated that 366,000 new claims were filed, which was higher than Wall Street’s estimate of 360,000 new jobless claims, but lower than the previous week’s 368,000 new jobless claims.
Falling U.S. Trade Deficit Signals Economic Uptick
The best economic news for last week came on Friday, when the U.S. trade deficit fell to its lowest level since January 2010. The Trade Balance Report for December shows the trade deficit at -$38.5 billion against expectations of -$46 billion and November’s deficit of -$48.7 billion. While a great boost for the economy, this is another indicator that recent low mortgage rates and home prices may soon become history.
Economic News scheduled for this upcoming week includes U.S. Treasury Auctions set for Tuesday, Wednesday and Thursday.
Retail Sales for January will be released on Wednesday and watched closely by investors. Retail sales account for approximately 70 percent of the U.S. economy and are viewed as a strong indicator of the economy’s direction.
Jobless Claims on Thursday, Industrial Production and Consumer Sentiment on Friday round out the week’s economic reports.
Mortgage rates worsened last week amid evidence of an improving economy. Conforming mortgage rates climbed in Colorado and nationwide, rising to a 4-month high.
Freddie Mac has the average 30-year fixed rate mortgage rate at 3.53% for borrowers willing to pay 0.7 discount points plus a full set of closing costs.
There was plenty of news on which for rates to move last week.
First, the Federal Open Market Committee (FOMC) met and voted to hold the Fed Funds Rate in its current target range near 0.00 percent. The Fed also recommitted to purchasing mortgage-backed securities (MBS) and Treasury securities on the open market until such time as the national Unemployment Rate reaches 6.5%, or until inflation rates rise.
Then, Friday, it was shown in the Non-Farm Payrolls report that the national jobless rate had climbed to 7.9 percent, a statistic Wall Street pinned to Hurricane Sandy. In addition, it was shown that 157,000 net new jobs were added to the U.S. economy in January.
This was a slight improvement from the month prior’s revised figures, and marked the 27th consecutive month of U.S. job growth.
Also last week, the National Association of REALTORS® reported the December Pending Home Sales Index to be lower than expected; largely the result of shortages of available homes in many areas.
In addition, Durable Orders for December were more than twice what investors expected; a further indication of a strengthening U.S. economy.
Lastly, the ISM Index for January surpassed Wall Street’s expectations. This manufacturing index is considered an indicator of future inflationary trends. An upward trend in this index suggests rising mortgage rates. While current mortgage rates remain relatively low, they can be expected to continue rising as the economy improves.
This upcoming week will be quieter with fewer economic series scheduled for release. Factory Orders for December will be announced, as will the ISM Services Index and Jobless Claims. Mortgage rates may continue to rise.
Mortgage rates rose last week as investors gained confidence in the global economy. China and Europe posted better-than-expected manufacturing rates, U.S. Jobless Claims fell for the second straight week, and the worst of the European debt crisis appears to have passed.
Last week’s economic news provided further evidence of a strengthening U.S. economy.
The National Association of REALTORS® released its Existing Home Sales report, which indicates that existing home sales improved by 13 percent on a year-over-year basis and are now at their highest point since 2007. The group expects sales of existing homes to increase by 9 percent in 2013.
The Commerce Department released its monthly New Home Sales report; while new home sales for December fell short of Wall Street’s expectations, sales of new homes are almost 20 percent higher than they were one year ago.
Growing demand for homes coupled with lower inventories of available homes suggests that the days of rock-bottom home prices and low mortgage rates are dwindling.
According to Freddie Mac, the average mortgage rate for a 30-year fixed rate loan was 3.42 percent with borrowers paying 0.7 percent in discount points plus closing costs. The average rate for a 15- year fixed rate mortgage was 2.71 percent with borrowers paying 0.7 percent in discount points plus closing costs.
While slight, the week-over-week increase in mortgage rates in Broomfield could become a trend.
Weekly Jobless Claims fell below Wall Street forecasts for the second week in a row. 330,000 new jobless claims were filed; far fewer new claims were filed than the 360,000 new jobless claims expected by investors. New jobless claims also fell below the prior week’s 335,000 new jobless claims. Fewer jobless claims are a sign of a stabilizing economy.
Mortgage rates typically rise as investors gain confidence in the economy and financial markets.
This week’s economic news calendar is jam-packed.
Investors await the outcome of the Federal Open Market Committee’s first scheduled meeting of 2013, treasury auctions are scheduled for Tuesday, Wednesday and Thursday, and the Pending Home Sales Index will be released.
Plus, the Department of Labor’s Non-farm Payrolls Report and Unemployment Report will be released Friday morning.
Mortgage rates rose last week nationwide during a week of sparse economic news.
Thursday’s weekly jobless claims report showed 371,000 new claims, which was 1,000 fewer jobless claims than for the prior week. Wall Street expectations of 365,000 new jobless claims turned out to be too optimistic.
The semi-quarterly statement released Thursday by the European Central Bank (ECB) announced that the region’s inflation remains below its 2 percent ceiling as established by central banker. Economic weakness in the Eurozone is expected to persist into 2013 with signs of recovery becoming evident toward the end of this year.
ECB cited financial and structural reforms as essential to economic recovery, and noted that national governments within the Eurozone have been slow to implement such reforms. Without such reforms, Euro-area economies may continue to struggle, which would likely lead investors to seek a safe haven in the bond market, moving bond prices higher.
As bond prices rise, mortgage rates in Longmont and nationwide typically fall.
Also last week, Freddie Mac’s Primary Mortgage Market Survey reported the average rate for a 30-year fixed rate mortgage rising from 3.34 percent to 3.40 percent for buyers paying 0.7 percent in discount points plus closing costs. The average rate for a 15-year fixed rate mortgage rose from 2.64 percent to 2.66 percent.
Required discount points for the 15-year fixed rate mortgage rose from 0.6 to 0.7 percent.
Import prices for December released Friday were reported at -0.1 percent, below the consensus estimate of +0.1 percent. This report measures the prices of goods purchased in the U.S, but produced abroad and is considered an important indicator of inflationary trends affecting internationally produced goods.
Inflation tends to harm mortgage rates.
Next week’s economic calendar is full of economic data and includes the release of the Producers Price Index (PPI), Retail Sales figures, the Consumer Price Index (CPI). The Fed is also set to issue its Beige Book report, and the NAHB Housing Market Index and Consumer Sentiment report will be released.
Mortgage rates remain low, but are rising.
Mortgage rates in Boulder rose during the first week of 2013.
The fiscal cliff crisis was resolved prior to the market’s opening Wednesday, when legislators voted to approve a deal. While many tax cuts were extended for taxpayers earning less than $450,000 annually, other facets of the fiscal cliff issue are yet to be addressed, including budget cuts for federal government agencies.
Investors were surprised to learn that the Fed may end its third round of quantitative easing (QE3) sometimes in 2013. The FOMC meeting minutes for December 2012 suggested that Fed support for its QE3 program has waned as the economy has improved.
First-time jobless claims increased for the week ending December 29, 2012 to 372,000 from the prior week’s 350,000, worse than Wall Street’s consensus opinion of 360,000 new jobless claims.
The December 2012 Non-Farm Payrolls surpassed analyst expectations, posting 155,000 net new jobs for the month. The report also showed the national Unemployment Rate rising one-tenth of one percentage point to 7.8%. When the jobless rate falls to 6.5%, the Federal Reserve is expected to begin raising the Fed Funds Rate from its current target range near zero percent.
Overall, mortgage rates rose by as much as 0.25 percentage points last week. However, because the increase occurred wholly between Wednesday and Friday, Freddie Mac’s weekly mortgage rate survey failed to include it.
Freddie Mac reported the previous week’s average rate for a 30-year fixed rate mortgage was 3.34 percent for borrowers paying 0.7 percent discount points plus closing costs. The average rate for a 15-year fixed rate mortgage was 2.64 percent for borrowers paying 0.7 discount points plus closing costs.
As this week opens, mortgage rates are considerably higher.
This week’s scheduled economic news includes Treasury auctions on Tuesday, Wednesday and Thursday; weekly Jobless Claims report on Thursday; and not much else. There will be planned speeches, however, from five members of the Federal Reserve, including Richmond Federal Reserve President Jeffrey Lacker.
Fed President Lacker was the lone dissenting vote among voting FOMC members in each of last year’s policy votes.