Last week’s economic reporting included the National Association of Home Builders Housing Market Index, government readings on housing starts and building permits, and data on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims were also released.
NAHB: Builder Confidence in Housing Market Conditions Slips by Two Points
Homebuilder confidence fell by two points to an index reading of 77 in April and was the lowest reading since September. Analysts expected this dip as mortgage rates and building materials costs continued to rise. Index readings over 50 indicate that most builders have positive views of housing market conditions. Index readings haven’t fallen below 50 since the beginning of the pandemic in April and May of 2020.
Robert Dietz, the chief economist for the NAHB, said: “The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices, and escalating materials costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.”
Analysts viewed the combined impact of rising home prices and mortgage rates as obstacles to affordability that would disproportionately affect first-time and moderate-income homebuyers.
Building permits held steady in March with 1.87 million permits issued at a seasonally-adjusted annual pace; analysts expected a reading of 1.82 million building permits issued. Likewise, housing starts were unchanged in March from February’s seasonally-adjusted annual pace of 1.79 million housing starts. Analysts predicted a reading of 1.73 million housing starts.
The National Association of Realtors® reported a slower pace of sales for previously-owned homes in March.5.77 million pre-owned homes were sold on a seasonally-adjusted annual pace as compared to a seasonally adjusted annual pace of 5.93 million previously-owned homes sold in February. Rising mortgage rates and home prices sidelined some first-time and moderate-income buyers and caused sales of previously-owned homes to fall.
Mortgage Rates Rise, Jobless Claims Fall
Freddie Mac reported that the average rate for 30-year fixed-rate mortgages surpassed five percent last week at 5.11 percent. The average rate for 15-year fixed-rate mortgages rose by 21 basis points to 4.38 percent. Rates for 5/1 adjustable rate mortgages rose by six basis points on average to 3.75 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
Initial jobless claims fell last week with 184,000 first-time claims filed as compared to 186,000 initial claims filed in the previous week. Continuing jobless claims were also lower with 1.42 million claims filed last week as compared to the prior week’s reading of 1.45 million continuing jobless claims filed.
This week’s scheduled economic reports include readings on home prices, new and pending home sales, and reports on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.Share
About the Author:Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.