Friday – February 18, 2022
Sales of existing homes saw a solid increase in January after declines were seen in December. Total Existing Home Sales rose 6.7% from December to January to an annualized rate of 6.50 million units and above the 6.10 million expected. Sales were down 2.3% year over year. Gains were seen across all four major regions in the U.S. monthly while the Northeast and West saw sagging sales annually.
The median existing home sale price in January was $350,300, up 15.4% from January 2021 ($303,600) and marks 119 consecutive months of year-over-year increases, the longest-running streak on record. Inventories fell to a record low of 1.6 months at the current sales pace. “Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist. “Consequently, housing prices continue to move solidly higher.”
Low supplies of homes on the market for sale saw mortgage applications to purchase new homes fall annually but managed gains month over month. The MBA reports that applications rose 10% from December 2021 to January but fell 12.5% from January 2021 to January 2022. The MBA estimates there were 66,000 new home sales last month, up from 60,000 in December 2021. Spokesperson Joel Kan said, “While homebuyer demand remains strong, purchase activity is being constrained by higher prices and building delays due to supply-chain pressures and building materials shortages.”
Courtesy of Mortgage Market Guide
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Thursday – February 17, 2022
Home borrowing costs continued to increase this week and hit their highest levels since May 2019. Freddie Mac reports that the 30-year fixed-rate mortgage jumped to 3.92% this week with 0.8 in points and fees. The record low was 2.65% on January 7, 2021. The 15-year rate averaged 3.15% with a 0.8 average point. Sam Khater, Freddie Mac’s Chief Economist said, “As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets.”
Cold temperatures across the U.S. hampered new home construction last month. The U.S. Census Bureau reports that total Housing Starts fell 4.1% in January from December to an annual rate of 1.638 million units and rose 0.8% from January 2021. Single-family starts fell 5.6% monthly to 1.116 million and were down 2.4% year over year. Multi-family dwellings declined 2.1% monthly and increased 8.7% from January 2021 to January 2022. Building Permits, a sign of future construction, rose 0.7% monthly and up 0.8% annually.
First-time unemployment claims rose in the latest week and are now back down to more normal pre-shutdown March 2020 levels. At present, there are almost 11 million jobs available across the nation. The Labor Department reports that Weekly Initial Jobless Claims rose 23,000 to 248,000 for the week ended February 11. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 1.593 million from 1.619 million.
Courtesy of Mortgage Market Guide
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Wednesday – February 16, 2022
Consumers opened their wallets and spent in January but higher prices for goods and services were seen across the board. January Retail Sales rose 3.8% monthly while annual sales were up nearly 13%. When stripping out autos, sales were up 3.8%. Online purchasing was a big factor in the numbers, with nonstore retailers seeing an increase of 14.5%. Furniture and home furnishing sales rose 2% while motor vehicle and parts dealers saw a 5.7% gain.
Home borrowing costs jumped in the latest week and the higher rates coupled with lofty homes prices are slowing demand a bit. The MBA reports that the 30-year fixed-rate mortgage rose 22 basis points to 4.05% with 0.45 in points. Within the report it showed that the Market Composite Index fell 5.4%, the Refinance Index decreased 9% while the Purchase Index fell by 1%. An MBA spokesperson said, “The 30-year fixed rate saw the largest single-week increase since March 2020 and was above the 4 percent mark for the first time since 2019. Consistent with this period of higher mortgage rates, refinance applications fell 9 percent last week and stood at around half of last year’s pace. The refinance share of applications was also at its lowest level since July 2019.”
Home builder confidence slipped this month from January as builders cite severe supply-side constraints. The NAHB Housing Market Index fell to 82 from 83 for the third straight monthly decline. However, the index has remained above 80 for the past five months. Any number over 50 indicates that more builders view conditions as good than poor. “Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops and appliances,” said NAHB Chairman Jerry Konter, a builder and developer from Savannah, Ga. “These delivery delays are raising construction costs and pricing prospective buyers out of the market.”
Courtesy of Mortgage Market Guide
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Tuesday – February 15, 2022
CoreLogic reports that single-family annual rent growth ended 2021 at a new record. U.S. Single-family rents rose 12% year over year in December. Annual rent growth saw record highs for all price tiers. Rent growth in Miami saw an astounding 36% annual gain. In other housing news, the MBA reports that mortgage credit availability decreased in January from December. A decline indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. Spokesperson Joel Kan said, “Credit availability declined to its lowest level since August 2021, even as the economy and job market continued to improve.”
Oil analyst Tom Kloza said this morning we could see oil prices at $125/bbl in Q2 2022 which would push the national average price for a regular gallon of gasoline to $5, currently at $3.50. That would be put a severe strain on businesses and consumers, who are already showing low optimism about the future. Oil prices are lower today due in part to easing Eastern European tensions. The all-time high price for gasoline was $4.11 back on July 17, 2008.
In economic news, wholesale inflation jumped monthly in January to 1% from 0.4% in December and above the 0.5% expected. The year-over-year number slipped to 9.7% from 9.8% in December and above the 9.1% anticipated. The Core rate rose to 0.8% monthly from 0.6% and above 0.5% projected and up 8.3% year over year from 8.5% and above the 7.9% expected. Empire Manufacturing rose to 3.10 in February from -0.70 in January and below the 12.15 expected.
Courtesy of Mortgage Market Guide
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Monday – February 14, 2022
Mortgage rates continue to move higher due in part to falling bond prices and higher yields. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 3.69% last week with 0.8 in points and fees. That is up from 3.11% at the end of December.
“The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic,” said Sam Khater, Freddie Mac’s Chief Economist. “Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand.”
Volatility continues in the markets. A potential political resolution between Russia and Ukraine removed some safe-haven trade – sending bond prices lower and yields higher. Ukraine is hinting at concessions that could avoid a conflict between the two Eastern European nations. There are no economic reports due for release today, but there is so much headline risk the rest of the week including tomorrow’s Producer Price Index. Housing Starts, Building Permits and Retail Sales will be released later in the week. A host of Fed Members will be speaking during the week.
RedFin reports that homebuyers’ monthly payments are up 25% to record high as people who need to move now are squeezed by increasing mortgage rates, lofty home prices and rising rents. The estimated monthly mortgage payment for a typical home for sale jumped 25% year over year to $388 to a record $1,931. That takes into account the all-time high median asking price of $376,000 recorded during the four weeks ending February 6, and an average 30-year mortgage rate of 3.69%.
Courtesy of Mortgage Market Guide
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