Kevin P. Nguyen

Equity Zone Mortgage-Elk Grove, California

What’s Ahead For Mortgage Rates This Week – November 2, 2020

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What's Ahead For Mortgage Rates This Week - November 2, 2020Last 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.

Case-Shiller Reports Fastest Home Price Growth in Two Years

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Case-Shiller Reports Fastest Home Price Growth in Two YearsHome prices rose at their fastest rate in two years according to Case-Shiller Home Price Indices. The National Home Price Index for August showed 5.70 percent home price growth year-over-year as compared to 4.80 percent growth reported in July.

The Case-Shiller 20-City Home Price Index showed that home prices rose to a 5.70 percent year-over-year pace from July’s growth rate of 4.10 percent. Phoenix, Arizona held the top home price growth rate for the 15th consecutive month with year-over-year home price growth of 9.90 percent. Seattle, Washington held second place with 8.50 percent growth in home prices. San Diego, California took third place with 7.60 percent year-over-year home price growth.

According to the 20-City Home Price Index, 19 of 20 cities reported growth in home prices. Detroit, MI has not reported home price information in recent months. Analysts said that low mortgage rates, short supplies of available homes, and changing consumer preferences drove home prices higher. The COVID pandemic caused homeowners and buyers to change preferences for home location, square footage, and amenities as working from home, school closures, and avoiding crowded urban areas adjusted family priorities.

Craig Lazzara, global head of index investment strategies for S&P Dow Jones Indices, said “If future reports continue in this vein,[positive index readings], we may be able to conclude that the COVID-related deceleration is far behind us.” It’s also possible that seasonal weather conditions and resurging COVID cases could slow home sales and home price growth.

Federal Housing Finance AgencyReports Highest Home Price Growth Rate Since 2006

August readings reported by FHFA also showed higher home prices. The agency, which oversees mortgage giants Fannie Mae and Freddie Mac, reported year-over-year home price growth of 1.50 percent from July to August; home prices for homes mortgaged or owned by Fannie Mae and Freddie Mac rose by eight percent annually. 

FHFA home price data is tracked nationally by census divisions, states, and metro areas. Information is also available by county and zip code.

Case-Shiller: Home Price Growth Rate Increases in July

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Case-Shiller: Home Price Growth Rate Increases in JulyHome price growth fueled by high demand for single-family homes was higher in July according to Case-Shiller’s National Home Price Index. Analysts said that millennials seeking to purchase homes and the continued exodus from large urban areas propelled rising home prices. Home prices grew fastest in the West and Southeastern regions.

While home prices grew moderately before the pandemic, high unemployment has not impeded rapid home price growth since the pandemic. Low mortgage rates and more demand for homes overcame consumers’ concerns about jobs and the economy. Analysts said that rapidly rising home prices could benefit homeowners struggling with mortgage payments as additional equity could provide more cash for relocation.

20-City Home Price Index: Three Top Cities in July

Home prices rose at the fastest pace in Phoenix  Arizona at 9.20 percent year-over-year. Seattle, Washington reported a home-price growth rate of 7.00 percent; Charlotte, North Carolina reported year-over-year home price growth of 6.00 percent. In July.

The COVID-19 pandemic caused many workers to switch from commuting to their jobs to working from home. Home-buyers also looked for homes in less-populated areas. 16 of 19 cities reported in July’s 20-City Home Price Index reported a faster pace of home price growth than in June. Detroit, Michigan did not report home prices for the July 20-City Home Price Index.

Homeowner migration from congested cities to suburbs was confirmed by Robert Dietz, the Chief Economist at the National Association of Home Builders, who said: “…builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating.” Building single-family homes in all price ranges would help ease the shortage of homes.

FHFA Reports Highest Home Price Growth Rate From May to July

The Federal Housing Finance Agency reported a record price growth rate of more than two percent for the two months between May 1 and June 30. FHFA reports data on homes owned or financed by Fannie Mae and Freddie Mac.

What’s Ahead For Mortgage Rates This Week – August 31, 2020

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What's Ahead For Mortgage Rates This Week - August 31, 2020Last week’s economic news included readings from Case-Shiller Home Price Indices, along with data on new and pending home sales. Weekly readings on mortgage rates and new and continuing jobless claims were also published.

Case-Shiller: Home Price GrowthHolds Steady in June

National home prices grew at a seasonally-adjusted annual pace of 4.30 percent in June, which was unchanged from May’s year-over-year growth rate for home prices. The 20-City Home Price Index rose by 3.50 percent year-over-year in June.  

Phoenix, Arizona reported the leading year-over-year home price growth rate of 9.00 percent. Seattle, Washington held second place with a year-over-year home price growth rate of 6.50 percent. Home prices in Tampa, Florida grew at a year-over-year pace of 5.90 percent.   

Home price growth rates rose in five of 19 cities reported in the 20-City Index; the Wayne County Michigan metro area did not report for June’s 20-City Home Price Index. 

New Home Sales Rise as Pending Home Sales Dip in July

Sales of new homes rose for the third consecutive month in July according to the U.S. Census Bureau. July’s reading of 901,000 new homes sold on a seasonally adjusted annual basis was the highest pace of sales since 2006. Sales of new homes were 36 percent higher year-over-year. Slim inventories of pre-owned homes for sale and low mortgage rates boosted new home sales, but analysts said that builders also face headwinds including higher materials costs and affordability.

Pending home sales dropped in July from June’s year-over-year reading of 15.80 percent to July’s reading of 5.80 percent. Ongoing concerns over COVID-19, high unemployment rates and, concerns over jobs have caused would-be-homebuyers to delay their home purchase plans.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower rates for fixed-rate mortgages last week with the average rate for 30-year fixed-rate mortgages falling by eight basis points to 2.91 percent. The average rate for 15-year fixed-rate mortgages also fell by eight basis points to 2.46 percent. Rates for 5/1 adjustable rate mortgages averaged 2.91 percent and were unchanged from the prior week.

New jobless claims fell to 1.01 million claims filed from the prior week’s reading of 1.10 million initial claims filed. Continuing jobless claims were also lower with 14.54 million continuing claims filed as compared to the previous week’s reading of 14.76 million continuing jobless claims filed.

What’s Ahead

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

Case-Shiller: June Home Prices Rise as Affordability Crisis Grows

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Case-Shiller: June Home Prices Rise as Affordability Crisis GrowsAccording to the National Case-Shiller Home Price Index for June, U.S. home prices rose 4.30 percent year-over-year, which was unchanged from May’s year-over-year home price growth rate. Home prices are expected to continue growing through 2020 as businesses reopen and COVID-19 restrictions ease.

Case-Shiller’s 20-City Home Price Index for May showed Phoenix, Arizona held the top spot with 9.00 percent year-over-year growth; Seattle, Washington followed with 650 percent growth in home prices. Tampa, Florida maintained its third-place position with 5.90 percent year-over-year home price growth. Five of 19 cities reporting in the 20-City Index showed a higher rate of home price growth. Wayne County, Michigan, which includes the Detroit metro area, did not provide information for June’s 20-City Home Price Index.

Craig Lazzara, managing director and global head of investment strategy at S&P Dow Jones Indices, wrote: “As has been the case for the last several months, home prices were particularly strong in the Southeast and West and were comparatively weak in the Midwest and Northeast.”

Short Supply of Single-Family Homes Continues to Fuel Rising Home Prices

Continued shortages of homes for sale and rising demand for homes caused home price gains in June. Analysts said that while low mortgage rates encouraged buyers to enter the market, overall housing market conditions did not contribute to affordable home prices. Analysts expressed concern that potential buyers were calculating affordability based on principal and interest payments and were not considering other costs of homeownership including taxes, hazard insurance, and mortgage insurance premiums that could be added to their monthly loan payments.

High home prices, COVID-19and ongoing unemployment, and decreasing growth in rental rates are obstacles to continued growth in home prices. Quarterly data published by the Federal Reserve Bank of St. Louis shows how average home prices have fallen in 2020. The national average price of a new home in the first quarter of 2020 was $383,000; in the second quarter of 2020, the average price of a new home was $368,000.

Average New Home Prices Fall in All U.S. Regions

Average regional U.S. home prices fell from the first quarter to the second quarter according to the Federal Reserve Bank of St. Louis. In the Northeast, the average price of a home fell to $622,000 from 645,200. The average price of a new home fell from $337,000 to $319,200 in the Midwest and fell from $325,300 to $315,500 in the South. The West had the highest average new home price in the second quarter of $459.900, but this was lower than the average new home price of $471,300 in the first quarter of 2020.

What’s Ahead For Mortgage Rates This Week – August 24, 2020

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What's Ahead For Mortgage Rates This Week - August 24, 2020Last week’s economic news included readings from Case-Shiller on home prices, the National Association of Home Builders Housing Market Indices, and sales of previously-owned homes. Readings on housing starts and building permits issued were released. Weekly reports on mortgage rates, new and continuing jobless claims were also published.

NAHB: Home Builder Confidence Rises in August

The National Association of Home Builders reported that builder confidence in housing market conditions rose six points to an index reading of 78.in August. The expected reading of 73 was based on July’s reading of 72. Homebuilder confidence was based on sharp demand for homes as city dwellers sought larger homes in less dense housing metro areas.

Ongoing shortages of pre-owned homes for sale boosted builder outlook as would-be buyers turned to new homes as supplies of pre-owned homes remained low.

The National Association of Realtors® reported higher numbers of previously owned homes sold in July at a seasonally adjusted annual pace of 5.86 million sales. 5.50 million sales of previously owned homes were expected based on June’s seasonally adjusted annual pace of 4.70 million sales.

Rising home sales could indicate increasing numbers of available homes, rising confidence in the economy, and sellers putting their homes on the market for reasons including buying bigger homes or relocation for less congested living conditions.

Commerce Department Reports Rising Rates of Housing Starts and Building Permits Issued

The Commerce Department reported a jump in U.S. housing starts in July with a seasonally adjusted annual rate of 1.496 million starts as compared to an expected pace of 1.330 million housing starts and an annual pace of  1.258 million housing starts reported in June.

Mortgage Rates Rise; Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week; the average rate for 30-year fixed-rate mortgages rose three basis points to 2.99 percent. Rates for 15-year fixed-rate mortgages averaged 2.54 percent and were eight basis points higher. Interest rates for 5/1 adjustable rate mortgages averaged one basis point higher at 2.91 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Initial jobless claims reported by states rose to 1.11 million new claims filed last week and surpassed the expected a reading of 910,000 new claims filed based on the prior week’s reading of  971,000 initial jobless claims filed. Continuing jobless claims fell to 14.80 million ongoing claims from the prior week’s reading of 15.50 million continuing claims.

What’s Ahead

This week’s scheduled economic news includes readings from Case-Shiller Home Price Indices, reports on new and pending home sales, and inflation. Weekly reports on mortgage rates and jobless claims will also be released.