Posts Tagged ‘Housing Starts’

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What’s Ahead For Mortgage Rates This Week – July 20, 2015


2015
07.20

Whats Ahead For Mortgage Rates This Week July 13 2015Last week’s economic news included an encouraging report from the National Association of Home Builders, whose housing market index held steady with a reading of 60 in July. This was the 13th consecutive month for readings over 50, which indicate that more builders are confident about housing markets than those who are not. July’s reading was noteworthy as it was the highest since November 2005 prior to the recession.

Housing Starts, Building Permits Increase

The Commerce Department provided further evidence of stronger housing markets with reports on housing starts and building permits issued in June. Housing starts rose from May’s reading of 1.07 million to 1.17 million, which surpassed the expected reading of 1.11 million housing starts.

May’s reading for housing starts was revised from 1.04 million to 1.07 million an annual basis.

Construction of apartments and other multifamily housing complexes attained their highest level since 1987, which supports reported trends that millennials who prefer to live in larger cities are renting rather than buying homes. Housing starts gained nearly 10 percent between May and June. Would-be home buyers are also renting due to tighter mortgage approval standards; others may be “sitting on the fence” as they wait for further indications of stronger labor markets and improvements in overall economic conditions.

Building permits issued in June supported trends in housing starts, with permits for multi-family housing units higher by 16. 10 percent and was the highest reading for multi-family building permits since 1990. Analysts said that the increase in multifamily building permits was in caused by the pending expiration of a tax credit for builders in New York State that was set to expire June 30.

Permits for single family homes rose only 0.90 percent in June, to an annual pace of 689,000 but this was still the highest reading for single family housing permits since 2008.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage averaged 4.09 percent and was higher by five basis points. The average rate for a 15-year mortgage was also five basis points higher at 3.25 percent. The average rate for a 5/1 adjustable rate mortgage was up by three basis points to 2.96 percent. Discount points were 0.60 percent for 15 and 30 year mortgages and 0.50 percent for 6/1 adjustable rate mortgages.

New jobless claims fell to 281,000 last week against the prior week’s reading of 296,000 new claims and an expected reading of 285,000 new jobless claims. Analysts said that the current reading indicates that last week’s spike in new unemployment claims was a false alarm. Seasonal anomalies and re-tooling at some auto plants were cited as causes for the prior week’s high reading. New jobless claims have remained under the benchmark reading of 300,000 since February for the longest consecutive period in 15 years.

Last week’s reports ended with the University of Michigan’s Consumer Sentiment Index, which fell from June’s reading of 96.1 to 93.3; analysts expected a reading of 95.0.

What’s Ahead

Scheduled economic reports for next week include new and existing home sales, and FHFA home prices along with weekly reports on mortgage rates and new jobless claims.

Comments Off on What’s Ahead For Mortgage Rates This Week – March 24, 2014

What’s Ahead For Mortgage Rates This Week – March 24, 2014


2014
03.24

What's Ahead For Mortgage Rates This Week - March 24, 2014Last week’s economic news included several housing-related reports including the Housing Market Index (HMI) for March, a report on housing starts, and building permits for February.

The National Association of REALTORS® also released its Existing Home Sales report for February and the Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen.

Home Builders Conservative On Housing Market Conditions

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have a positive view of housing market conditions than not.

Conditions contributing to the sluggish reading included a lack of lots for development and labor shortages. The NAHB also cited rising home prices and mortgage rates as reasons for builders’ conservative outlook.

Commerce Department: Housing Starts And Building Permits

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 expected housing starts and January’s reading of 909,000 housing starts. Severe winter weather froze construction and transport of building supplies.

Building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000 building permits issued.

February’s reading represents a 7.70 percent increase over January’s permits issued and was attributed to a sharp rise in plans for condominiums and rental housing projects.

407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives.

Existing Home Sales Fall, Rising Home Prices And Mortgage Guidelines Cited

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold.

Analysts identified familiar causes such as high mortgage rates and home prices, bad weather and a short supply of available homes for the dip in existing home sales. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle to would-be home buyers as mortgage lenders keep a tight rein on mortgage credit policies.

Federal Open Market Committee Statement Details $10 Billion Dollar Change

Reports indicate that Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low.

The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly.

Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent.

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy.

Janet Yellen, in her first press conference as fed chair, said that the Fed may consider rising short-term interest rates a few months before its original target of October to December of 2015.

Mortgage Rates Drop

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent.

The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead This Week

Scheduled economic reports for this week include the Case-Shiller and FHFA Home Price Indexes for January. New Home Sales and Pending Home Sales will also be released.

Comments Off on What’s Ahead For Mortgage Rates This Week – March 24, 2014

What’s Ahead For Mortgage Rates This Week – March 24, 2014


2014
03.24

What's Ahead For Mortgage Rates This Week - March 24, 2014Last week’s economic news included several housing-related reports including the Housing Market Index (HMI) for March, a report on housing starts, and building permits for February.

The National Association of REALTORS® also released its Existing Home Sales report for February and the Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen.

Home Builders Conservative On Housing Market Conditions

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have a positive view of housing market conditions than not.

Conditions contributing to the sluggish reading included a lack of lots for development and labor shortages. The NAHB also cited rising home prices and mortgage rates as reasons for builders’ conservative outlook.

Commerce Department: Housing Starts And Building Permits

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 expected housing starts and January’s reading of 909,000 housing starts. Severe winter weather froze construction and transport of building supplies.

Building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000 building permits issued.

February’s reading represents a 7.70 percent increase over January’s permits issued and was attributed to a sharp rise in plans for condominiums and rental housing projects.

407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives.

Existing Home Sales Fall, Rising Home Prices And Mortgage Guidelines Cited

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold.

Analysts identified familiar causes such as high mortgage rates and home prices, bad weather and a short supply of available homes for the dip in existing home sales. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle to would-be home buyers as mortgage lenders keep a tight rein on mortgage credit policies.

Federal Open Market Committee Statement Details $10 Billion Dollar Change

Reports indicate that Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low.

The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly.

Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent.

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy.

Janet Yellen, in her first press conference as fed chair, said that the Fed may consider rising short-term interest rates a few months before its original target of October to December of 2015.

Mortgage Rates Drop

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent.

The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead This Week

Scheduled economic reports for this week include the Case-Shiller and FHFA Home Price Indexes for January. New Home Sales and Pending Home Sales will also be released.

Comments Off on What’s Ahead For Mortgage Rates This Week – March 24, 2014

What’s Ahead For Mortgage Rates This Week – March 24, 2014


2014
03.24

What's Ahead For Mortgage Rates This Week - March 24, 2014Last week’s economic news included several housing-related reports including the Housing Market Index (HMI) for March, a report on housing starts, and building permits for February.

The National Association of REALTORS® also released its Existing Home Sales report for February and the Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen.

Home Builders Conservative On Housing Market Conditions

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have a positive view of housing market conditions than not.

Conditions contributing to the sluggish reading included a lack of lots for development and labor shortages. The NAHB also cited rising home prices and mortgage rates as reasons for builders’ conservative outlook.

Commerce Department: Housing Starts And Building Permits

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 expected housing starts and January’s reading of 909,000 housing starts. Severe winter weather froze construction and transport of building supplies.

Building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000 building permits issued.

February’s reading represents a 7.70 percent increase over January’s permits issued and was attributed to a sharp rise in plans for condominiums and rental housing projects.

407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives.

Existing Home Sales Fall, Rising Home Prices And Mortgage Guidelines Cited

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold.

Analysts identified familiar causes such as high mortgage rates and home prices, bad weather and a short supply of available homes for the dip in existing home sales. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle to would-be home buyers as mortgage lenders keep a tight rein on mortgage credit policies.

Federal Open Market Committee Statement Details $10 Billion Dollar Change

Reports indicate that Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low.

The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly.

Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent.

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy.

Janet Yellen, in her first press conference as fed chair, said that the Fed may consider rising short-term interest rates a few months before its original target of October to December of 2015.

Mortgage Rates Drop

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent.

The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead This Week

Scheduled economic reports for this week include the Case-Shiller and FHFA Home Price Indexes for January. New Home Sales and Pending Home Sales will also be released.

Comments Off on What’s Ahead For Mortgage Rates This Week – March 24, 2014

What’s Ahead For Mortgage Rates This Week – March 24, 2014


2014
03.24

What's Ahead For Mortgage Rates This Week - March 24, 2014Last week’s economic news included several housing-related reports including the Housing Market Index (HMI) for March, a report on housing starts, and building permits for February.

The National Association of REALTORS® also released its Existing Home Sales report for February and the Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen.

Home Builders Conservative On Housing Market Conditions

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have a positive view of housing market conditions than not.

Conditions contributing to the sluggish reading included a lack of lots for development and labor shortages. The NAHB also cited rising home prices and mortgage rates as reasons for builders’ conservative outlook.

Commerce Department: Housing Starts And Building Permits

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 expected housing starts and January’s reading of 909,000 housing starts. Severe winter weather froze construction and transport of building supplies.

Building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000 building permits issued.

February’s reading represents a 7.70 percent increase over January’s permits issued and was attributed to a sharp rise in plans for condominiums and rental housing projects.

407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives.

Existing Home Sales Fall, Rising Home Prices And Mortgage Guidelines Cited

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold.

Analysts identified familiar causes such as high mortgage rates and home prices, bad weather and a short supply of available homes for the dip in existing home sales. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle to would-be home buyers as mortgage lenders keep a tight rein on mortgage credit policies.

Federal Open Market Committee Statement Details $10 Billion Dollar Change

Reports indicate that Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low.

The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly.

Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent.

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy.

Janet Yellen, in her first press conference as fed chair, said that the Fed may consider rising short-term interest rates a few months before its original target of October to December of 2015.

Mortgage Rates Drop

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent.

The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead This Week

Scheduled economic reports for this week include the Case-Shiller and FHFA Home Price Indexes for January. New Home Sales and Pending Home Sales will also be released.

Comments Off on What’s Ahead for Mortgage Rates This Week: December 24, 2012

What’s Ahead for Mortgage Rates This Week: December 24, 2012


2012
12.24

Existing Home SalesMortgage markets worsened last week amid ongoing discussions budget and tax conversations in Washington, D.C., and the release of key housing and economic data.

Mortgage rates climbed in CA and nationwide.

Freddie Mac reported the average 30-year fixed rate mortgage rate at 3.37 percent nationwide for borrowers willing to pay an accompanying 0.7 discount points at closing, plus closing costs — an increase of 0.05 percentage points from the week prior.

The average 15-year fixed rate mortgage rate was listed at 2.65 percent nationwide with an accompanying 0.7 discount points plus a full set of closing costs.

With certain government funding and tax reductions set to expire December 31, legislators appear unlikely to avoid what’s been called the “Fiscal Cliff”. Some economists believe that reaching January 1 with no agreement in place will set the economy in to recession.

Mortgage rates tend to improve on “negative” news for the economy, which partially explains why mortgage rates made a small comeback late in the week.

In other news, according the National Association of REALTORS®, Existing Home Sales reached their highest point since November 2009, climbing to 5.04 million homes sold on a seasonally-adjusted, annualized basis. In addition, the real estate trade group reports that the Existing Home Supply has dropped to 4.8 months — a figure firmly suggesting a “seller’s market”.

Separately, the Commerce Department reported single-family housing starts rising, too; down 4.1 percent in November but up nearly 23 percent as compared to November 2011.

This week, Fiscal Cliff discussions are likely to dominate mortgage markets. The trading week will be holiday-shortened and volume will be lighter-than-normal. This may lead to volatile pricing and rapid interest rate movements.

Markets close early Monday and remain closed through Tuesday. Wednesday, markets re-open with no new data set for release. Then, Thursday, scheduled economic news events resume Thursday with New Home Sales, Jobless Claims and Consumer Confidence due.

Friday, the Pending Home Sales Index is released.

Comments Off on Housing Starts, Building Permits Rising Into 2013

Housing Starts, Building Permits Rising Into 2013


2012
12.21

Housing Starts November 2011Single-family housing starts took a small step back in November.

According to the monthly Housing Starts report from the U.S. Department of Commerce, single-family housing starts tallied 565,000 in November 2012 on a seasonally-adjusted, annualized basis. This marks a 4 percent decline from October, but is more than 100,000 higher than the count from 12 months ago.

Clearly, the nation’s new home construction market is expanding.

On a regional basis, single-family housing starts have been strongest in the Midwest; and Hurricane Sandy appears to have affected the number of starts across the Northeast.

As compared to one year ago:

  • Northeast Region : Housing starts down 19% on an annual basis
  • Midwest Region : Housing starts up 40% on an annual basis
  • South Region : Housing starts up 24% on an annual basis
  • West Region : Housing starts up 33% on an annual basis

It’s expected that new construction growth will continue into 2013, too. This is because the Department of Commerce report also showed Building Permits mostly unchanged for November at 565,000 units on a seasonally-adjusted annualized basis.

As compared to November 2011, this marks a 25% increase. Permits for multi-family homes are up 17%, too.

There are more building permits being issued today that at any time in the last 4 years.

For home buyers, this may be good news. Rising permits and housing starts suggests a more healthy U.S. economy, but it also means that home supplies may not be as tight throughout the next few months.

Overly-tight home supplies in some U.S. markets have contributed to rapidly rising home values. With more construction and larger home inventories, home prices may rise in 2013 less slowly.

The good news, though, is the mortgage rates in Scottsdale remain near all-time lows and low- and no-downpayment mortgage programs are abundant. For today’s home buyer, there are plenty of affordable ways to purchase a home.

Talk with your real estate agent and your loan officer to see which plan works best for you.

Comments Off on More Bullish Data : Housing Starts Climb 3.6%

More Bullish Data : Housing Starts Climb 3.6%


2012
11.23

Housing StartsAccording to a joint release from the U.S. Census Bureau and the Department of Housing and Urban Development, Housing Starts rose 3.6% in October 2012, climbing to a seasonally-adjusted, annualized rate of 894,000 units.

A “housing start” is a new home on which construction has started and the report gives buyers and sellers across AZ yet one more reason to be optimistic for the 2013 housing market.

Regionally, Housing Starts varied.

The West and Midwest Regions posted gains between September and October 2012; and, the South and Northeast Regions posted declines. The latter was affected by the effects of Hurricane Sandy.

  • West Region : +17.2% from the month prior
  • Midwest Region : +8.9% from the month prior
  • South Region : -2.5% from the month prior
  • Northeast Region : -6.5% from the month prior

Single-family housing starts — starts for homes not considered multi-unit properties or to be apartment buildings — was mostly unchanged, slipping 1,000 units on a seasonally-adjusted annualized basis.

The Housing Starts data is the third housing-related release this week that hints at a strong start for the 2013 housing market.

Early in the week, the National Association of Homebuilders released its Housing Market Index (HMI), a measure of home builder confidence in the new construction market. The HMI posted 46 — the highest reading since 2006. With mortgage rates low and buyer traffic high, builders are expecting a rash of sales between now and the New Year, and an elevated number of closing over the next six months, in general.

The HMI is scored on a scale of 1-100. One year ago, it read 19.

Then, the National Association of REALTORS® showed Existing Home Sales climbing 2.1% and home supply fell to a multi-year low. At the current sales pace, the entire U.S. home inventory would be sold in just 5.4 months. Analysts believe that a home supply of less than 6.0 months favors home sellers.

In unison, these three housing market reports suggest a sustained, national housing market recovery. Home prices are expected to rise into next year’s housing market.

Comments Off on Single-Family Housing Starts Rise To 4-Year High

Single-Family Housing Starts Rise To 4-Year High


2012
10.18

Housing StartsThe housing market continues to improve.

According to the U.S. Census Bureau, on a seasonally-adjusted, annualized basis, Single-Family Housing Starts rose to 603,000 last month, an 11 percent increase from the month prior and the highest reading in more than 4 years. 

A “housing start” is a home on which construction has started and home builders are breaking ground at rates not seen even during the 2010 federal home buyer tax credit period.

It’s a signal to home buyers throughout Arizona that the U.S. housing market may be permanently off its bottom.

At least, the nation’s home builders seem to think so.

Earlier this week, the National Association of Homebuilders reported home builder confidence at a 5-year high and nearly triple the levels of last September.

Buoyed by rising sales volume and the heaviest foot traffic since 2006, builders expect the next 6 months of sales to outpace the current rate. It may spell higher home prices for today’s new construction buyer.

Thankfully, mortgage rates remain low.

As compared to last year, today’s buyers have extended purchasing power. Assuming a 20 percent downpayment and a conforming home loan :

  • September 2011 : A $1,000 mortgage payment afforded a purchase price of $202,000
  • September 2012 : A $1,000 mortgage payment afforded a purchase price of $226,000

That’s an 11.9% increase in purchasing power increase over just twelve months. When combined with today’s rising rents throughout many U.S. markets, demand for new construction homes remains high and builders have taken notice.  Buyers should, too.

With mortgage rates low, low downpayment programs available and home prices poised to rise, it’s an opportune time to be a home buyer. Housing has been trending better since late-2011 and will likely carry that momentum forward into 2013. 

If you’ve been shopping new construction, remember that as mortgage rates and home prices rise, home affordability drops. 

Comments Off on What’s Ahead For Mortgage Rates This Week : September 24, 2012

What’s Ahead For Mortgage Rates This Week : September 24, 2012


2012
09.24

Existing Home Sales Mortgage markets improved for the second consecutive week last week as demand for U.S. mortgage-backed bonds remained high. A series of economic reports showed strength in housing and a stability in jobs.

Wall Street looked past it, however, to send mortgage rates to their lowest levels in history.

One week into the Federal Reserve’s newest bond-buying program, the stimulus appears to be working.

According to Freddie Mac, the average 30-year fixed rate mortgage rate slipped to 3.49% last week for borrowers willing to pay an accompanying 0.6 discount points at the time of closing. Discount points are a one-time closing costs where 1 discount point is equal to one percent of your loan size.

3.49% marks a new all-time low for the 30-year fixed rate mortgage. 

The 15-year fixed rate mortgage rate fell to a new all-time low last week, too, dropping to 2.77% with the same accompanying 0.6 discount points.

Mortgage rates in Arizona fell despite strong housing data.

  • Housing Starts rose 5.5% to a 2-year high
  • Existing Home Sales rose 7.8% to a 2-year high
  • Building Permits rose 0.2%

Notably, according to the National Association of REALTORS®, the national existing home supply slipped to 6.1 months last month — very close to the 6.0-month marker which separates a “buyer’s market” from a “seller’s market”.

If supplies continue lower, home prices may rise more quickly than expected into 2013. Median home sale prices are already 9.5% higher as compared to one year ago.

This week, more housing data is set for release including the home value-tracking Case-Shiller Index and FHFA Home Price Index. Both are expected to show rising home prices as compared to the last recorded month, and one year ago. In addition, the National Association of REALTORS® releases its Pending Home Sales Index.

Lastly, and likely most important to mortgage rates and home affordability in Scottsdale , the government releases its Personal Consumption Expenditures (PCE) report Friday. PCE is the Federal Reserve’s preferred inflation gauge. An unexpected increase is expected to move mortgage rates higher.