Last week’s economic news included readings on home builder confidence, housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims were also released; the week wrapped with the University of Michigan’s report on consumer sentiment.
Home Builder Confidence Dips, Remains in Positive Territory
According to the National Association of Home Builders, builder confidence dropped two points in January to 72, but high demand for homes continued to provide builders with positive outlooks on housing market conditions. While continued concerns over labor and lot shortages were cited, home builders surveyed for January’s Housing Market Index said that High demand for homes and recent tax legislation kept more builders confident than those who were not. Any reading over 50 indicates positive builder sentiment.
Housing Starts, Building Permits Fall in December
Housing starts fell 8.20 percent in December according to the Commerce Department. 1.192 million starts were forecast on a seasonally- adjusted annual basis; analysts expected a reading of 1.280 million starts based on November’s reading of 1.299 million starts. 1.302 million building permits were issued in December on a seasonally-adjusted annual basis. November’s reading was higher at 1.303 million building permits issued.
Mortgage Rates Rise, New Jobless Claims
Freddie Mac reported higher mortgage rates for the second week in a row. The average rate for a 30-year fixed rate mortgage rose five basis points to 4.04 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.49 percent and the average rate for a 5/1 adjustable rate mortgage was unchanged at 3.46 percent. Discount points averaged 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for 15-year fixed rate mortgages. Discount points averaged 0.30 percent for 5/1 adjustable rate mortgages.
New jobless claims were lower with 220,000 new claims filed as compared to estimates of 250,000 new claims. 261,000 new claims were filed the prior week. Consumer sentiment was lower in January with an index reading of 94.40. Analysts expected the consumer sentiment index to reach 98.00, based on December’s reading of 95.90 percent, but uncertainty over tax benefits connected with recent legislation and rising interest rates contributed to the lowest consumer sentiment index reading since July.
What‘s Ahead
This week’s scheduled economic reports include readings on new and existing home sales along with weekly readings on mortgage rates and first-time jobless claims.
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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.