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Daily Rate Update: February 15th-19th

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Friday – February 19, 2021

The National Association of REALTORS reports that Existing Homes Sales rose 0.6% in January from December to an annual rate of 6,690,000 annualized units. Sales were up nearly 24% from a year ago. Gains were seen in the Midwest and South, with declines in the Northeast and West. The median existing-home price for all housing types jumped 14.1% annually to $303,900. Housing inventories are at an anemic 1.9 months, down almost 26% from a year ago. Spokesperson Lawrence Yun said, “Home sales are continuing to play a part in propping up the economy. With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”

An article in the Wall Street Journal is circulating and you can see it on the Tabrasa LinkedIn page. Dr. Markary highlights that COVID cases are down 77% in the last six weeks and we will have herd immunity by April. As COVID continues to lose its grip, big states like New York and California are moving closer to reopening their economies as the two states combined makeup nearly 25% of U.S. Gross Domestic Product. Remember, the is week, Retail Sales for January was five times higher than expectations with these big states hardly participating.

Courtesy of Mortgage Market Guide 

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Thursday – February 18, 2021

Home borrowing costs inched higher this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 2.81% from 2.73% with 0.7 in points and fees. A year ago at this time, the rate averaged 3.49%. Sam Khater, Freddie Mac’s Chief Economist, said, “Reaching its highest point since mid-November, the 30-year fixed-rate mortgage averaged 2.81% this week. While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3% range for the year.”

First-time unemployment claims remain stubbornly high while 10 million Americans are still without a job. Displaced workers filing for first-time unemployment benefits rose to 861,000 for the week ended February 13, 2021 from 848,000 in the previous week. to 793,000 from 812,000. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,494,000 from 4,558,000. Several of the states that were under lockdown measures have slowly begun to open up. When the economy fully reopens many workers should be able to go back to work.

The Census Bureau reports that Housing Starts were down 6% in January to an annual rate of 1,580,000 versus the 1,670,000 expected. It was the first monthly decline since August 2020. A jump in lumber costs has curtailed some building projects. Starts were down 2.3% year over year. Single-family starts were down 12% monthly and up 17% annually. Multi-family dwellings were up 16% monthly and down 35% annually. Building Permits, a sign of future construction, jumped 10% to 1,881,000 versus the 1,670,000 expected. That is a very strong number which suggests builders “expect” to be building more in the future.

Courtesy of Mortgage Market Guide 

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Wednesday – February 17, 2021

Mortgage rates remained at record lows in the latest survey but inched higher last week. The MBA reports that the 30-year fixed-rate mortgage rose two basis points to 2.98% with 0.37 in points for the week ended February 12, 2021. The Market Composite Index, a measure of total mortgage loan application volume, declined 5.1%, the Purchase Index fell by 6%, while the Refinance Index decreased by 5%. Spokesperson Joel Kan said, “The housing market in early 2021 continues to be constrained by low inventory and higher prices.”

In economic news, wholesale inflation or the Producer Price Index (PPI) showed an increase of 1.3% versus an expected gain of 0.5%. The Core rate, which strips out volatile food and energy, was well above expectations at 1.2% in January. Also, January Retail Sales surged by 5.3%, five 5 times the 0.8% expected as some pent-up demand and stimulus checks fueled the big gains. Consumer spending makes up two-thirds of the U.S. economy.

Prices at the pumps continued to push higher in the latest survey fueled by gushing oil prices. The severe cold and snow in Texas has decreased production and has pushed West Texas Intermediate(WTI) oil to $60/barrel, the highest since January 2020. The national average price for a regular gallon of gasoline is at $2.53, up from $2.38 a month ago. A year ago the price was $2.43 while the record high price was on July 17, 2008 at $4.11. The price for WTI went negtive for the first time ever in April 2020, meaning you would have to pay someone to take a barrel of oil from you. “Crude, not demand, has been the main factor driving gas price increases this year,” said Jeanette Casselano McGee, AAA spokesperson.

Courtesy of Mortgage Market Guide 

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