Thursday – December 16, 2021
Home borrowing costs are essentially unchanged this week and remain just above historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage rose two basis points to 3.12% with 0.6 in points and fees. The record low was 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “Mortgage rates inched up as a result of economic improvement and a shift in monetary policy guidance,” said Sam Khater, Freddie Mac’s Chief Economist. “While house price growth is slowing, prices remain high due to solid housing demand and low supply. We expect rates to continue to increase into 2022 which may leave some potential homebuyers with less room in their budgets on the sideline.”
First-time unemployment claims remained low in the latest week and continue to get back to normal as the pandemic subsides. At present, there are 11 million jobs available across the nation. The Labor Department reports that Weekly Initial Jobless Claims rose 18,000 to 206,000 for the week ended December 9, 2021. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 1.1.845 million from 1.999 million. The labor market should continue to improve with the holiday shopping season well underway.
The continued demand for housing showed in last month’s numbers as the number of privately-owned housing starts jumped from October. November Housing Starts were up nearly 12% from October to an annual rate of 1.679 million units versus the 1.568 million expected. Total sales were up 8.3% annually. Single-family start increased 11.3% and fell 0.8% year over year. Building Permits rose 3.6% to 1.712 million versus the 1.663 million expected. Multi-family dwellings rose 12.1% monthly, up 39% annually.
Courtesy of Mortgage Market Guide
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Wednesday – December 15, 2021
Home borrowing costs were unchanged in the latest week and remain just above historic lows. The MBA reports that that the 30-year fixed-rate mortgage stands at 3.30% with 0.39 in points. Within the report it showed that the Market Composite Index fell 4%, the Refinance Index decreased 6% while the Purchase Index rose 1%. An MBA spokesperson said, “Housing demand remains strong as the year comes to an end amidst tight inventory and steep home-price growth.”
Home builders report that demand remains strong for housing though obstacles still abound in the sector. The inability to find workers, predicting pricing along with supply shortages remain a challenge. The NAHB Housing Market Index for newly-built single-family homes rose to 84 this month, matching the highest level this year in February. Within the report, it showed that the current sales conditions and the gauge charting traffic of prospective buyers both rose slightly. “The most pressing issue for the housing sector remains lack of inventory,” said NAHB Chief Economist Robert Dietz.
Holiday sales in 2021 are expected to be robust and already have been strong according to reports. The National Retail Federation (NRF) is forecasting that spending in November and December could increase as much as 11.5% compared with the same period a year ago, exceeding numbers forecasted in October. The NRF is forecasting sales in November and December will hit an all-time high of between $834.4 billion and $859 billion. In 2020, holiday sales rose 8.2% from 2019 to a record $777.3 billion.
Courtesy of Mortgage Market Guide
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Tuesday – December 14, 2021
The Producer Price Index rose 0.8% in November, above the 0.5% expected and up from 0.6% in October. Core PPI rose 0.7% monthly versus 0.4% expected. Annually, PPI jumped 9.6%, Core 7.7%, both record highs. The Fed will be dissecting the numbers as the FOMC meeting kicks off today in D.C. with the monetary policy statement being released tomorrow with a set of economic projections at 2:00 p.m. ET with Fed Chair Powell’s press conference at 2:30.
The two-day FOMC meeting kicks off today and culminates on Wednesday with the 2:00 p.m. ET release of the monetary policy statement which includes economic projections. There is a zero percent chance of a hike to the short term Fed Funds Rate, currently at 0.25%. Fed Chair Powell will hold a press conference at 2:30. Expect to hear that the taper, or decreased buying of Mortgage Bonds and Treasury securities, to be sped up while concerns surround about which Fed Chair Powell up – the new hawkish Powell or a revisit from the dovish Powell the markets have enjoyed the last 20 months.
The NFIB Small Business Optimism Index rose slightly in November but obstacles still abound. Within the report it showed that 48% of owners reported job openings that could not be filled, a decrease of one point from October. “As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases,” said NFIB Chief Economist Bill Dunkelberg. “Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.”
Courtesy of Mortgage Market Guide
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