Home in winter

Daily Rate Update: February 22nd-26th

posted in: News | 0

Friday – February 26, 2021

Inflation data for January was inline with estimates though pockets of prices have surged. For instance, lumber prices have soared over the past year which is or will be added the price of a new home. The price for lumber hit $1,000 recently up from $264 on April 2, 2020. The NAHB is urging Congress to call on lumber suppliers to ramp up production. The NAHB said, “Soaring lumber prices are adding thousands of dollars to the cost of a new home, pricing out millions of potential home buyers and impeding the residential construction sector from moving the economy forward.”

The $600 stimulus checks that came in late December early January pushed both personal spending and personal incomes up 2.4% and 10%, respectively in January from December. On the inflation front, the Core PCE, the Federal Reserve’s favorite inflation gauge, rose 1.5% year over year, unchanged from December. The monthly Core PCE rose 0.3% also unchanged from the prior month. The Federal Reserve has set its inflation target at 2% or above but the gauge has been trending below that level for quite some time.

Rounding out this week’s economic data was the Chicago PMI falling to 59.5 in February from 63.8 in January. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The data showed a gain in the employment component. Consumer Sentiment was inched lower in February to 76.8 from 79 in January as the decline in the index was due to future economic prospects among households with incomes below 75,000.

Courtesy of Mortgage Market Guide 

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Thursday – February 25, 2021

Home borrowing costs continued to rise this week but remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 2.97% from 2.81% with 0.6 in points and fees. A year ago at this time, the rate averaged 3.49%. Sam Khater, Freddie Mac’s Chief Economist, said, “Though rates continue to rise, they remain near historic lows. However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.”

First-time unemployment claims remain stubbornly high but fell in the latest week while 10 million Americans are still without a job. Weekly Initial Jobless Claims declined to 730,000 for the week ended February 20, 2021, from 841,000 in the previous week. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,419,000 from 4,520,000. 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.

In economic news, Durable Orders surged by 3.4% in January from 1.2% in December while the Q4 2020 2nd read on Gross Domestic Product (GDP) remained at 4.1%. The Atlanta Fed’s GDPNow model estimates a 9.5% gain for Gross Domestic Product for Q1 2021. And if big GDP contributing states like California and New York fully reopen their economies, the economy could have further room to grow.

Courtesy of Mortgage Market Guide 

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Wednesday – February 24, 2021

The U.S. Census Bureau reports that New Home Sales rose 4.3% in January from December to an annual rate of 923,000 versus the 855,000 expected. Sales were up nearly 20% from January 2020. Gains were seen in the Midwest, South and West with losses in the Northeast. The median price of a new home in January was $346,400, up more than 5% from a year ago. Inventories for new homes fell to four months from five months. The housing sector continues to be a beacon of light for the U.S. economy.

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 ten basis points to 3.08% with 0.46 in points for the week ended February 12, 2021. The Market Composite Index, a measure of total mortgage loan application volume, declined 11.4%, the Purchase Index fell by 11.6%, while the Refinance Index decreased by 11.3%. Spokesperson Joel Kan said, “The housing market in most of the country remains strong, with activity last week 7% higher than a year ago.”

Courtesy of Mortgage Market Guide 

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Tuesday – February 23, 2021

Home prices continue to rise due in part to low inventories and a shift from urban apartments to suburban homes. The December S&P Case-Shiller 20-City Home Price Index rose by 10.1% annually while the National Index jumped 10.4%. Month over month, the National Index posted a 0.9% gain while the 20-City Composite rose 0.8%. Spokesperson Craig J. Lazzara said, “These data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This may indicate a secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway.”

Consumer confidence rose in February January as the COVID loosens its grip and as closed states begin to reopen. The Consumer Confidence Index rose to 91.3 this month from 88.9 in January and just above the 91 expected. Most of the components in the survey increased. Those surveyed that said jobs are “plentiful” increased 22% from 20% while those claiming jobs are “hard to get” fell to 21.2% from 22.5%. Spokesperson Lynn Franco said, “Consumers remain cautiously optimistic, on the whole, about the outlook for the coming months.”

Gas prices at the pumps continue to rise while oil prices gush higher. West Texas Intermediate oil has risen to nearly $62/barrel from the -$40/barrel seen in April 2020. Forced shutdowns of Gulf coast and Mid-West refineries due to the recent winter weather have decreased gasoline stocks. The national average price for a regular gallon of gasoline is at $2.64, up from $2.40 a month ago and from $2.47 a year ago. The highest price ever recorded was $4.11 on July 17, 2008. AAA said, “Gas prices are likely to be volatile until crude production is back to normal levels. Motorists can expect these more expensive prices to stick around, but large spikes are likely to subside.”

Courtesy of Mortgage Market Guide 

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp


Monday – February 22, 2021

The House of Representatives is expected to vote on the $1.9T stimulus relief plan this week and will most likely get passed without GOP support. Huge government spending continues to impact the bond markets negatively way as rates have inched higher in the past month. The bill includes $1,400 direct payments for those who qualify, support for small businesses, enhanced unemployment, funds for an underground train for Silicon Valley, an increase in SNAP benefits, aid to some U.S. states, possibly a $15 minimum wage and school funding.

Economic data is on the heavy side this week with housing, manufacturing, consumer attitudes and spending, economic growth and inflation data. There are no reports due out today. Fed Chair Powell will be in front of the House and Senate this week in his regularly scheduled semi-annual economic testimony. Mr. Powell most likely won’t be offering any new rhetoric on the U.S. economy and asset purchases, but the event will be closely watched.

Courtesy of Mortgage Market Guide 

-CHECK US OUT ON SOCIAL-

Facebook

Twitter

YouTube

LinkedIn

Yelp