Thursday – June 30, 2022
Home borrowing costs fell this week but remain well above levels seen earlier this year. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 5.70% this week from 5.81% last week with an average of 0.8 in points and fees. A year ago the rate was 2.98%. The 15-year inched declined to 4.83% from 4.92% with a 0.9 point. A year ago that 15-year was 2.26%. Sam Khater, Freddie Mac’s Chief Economist said, “This pause in rate activity should help the housing market rebalance from the breakneck growth of a seller’s market to a more normal pace of home price appreciation.”
The Fed’s favorite inflation gauge, the Core PCE, rose 4.7% year over year in May, just below the 4.8% expected and down from 4.9% in April. Monthly, the Core PCE rose 0.3% versus 0.4% expected matching April’s number. Personal Income rose 0.5% matching both expectations and the April number while Personal Spending was up 0.5% versus 0.5% expected and matching April’s number.
In other economic news, Weekly Initial Jobless Claims rose 2,000 to 231,000 for the week ended June 24. Continuing claims inched lower to 1.328 million from 1.1331 million. The Chicago PMI in June declined to 56 from 60.3 in May and below expectations of 58. It was the lowest reading since August of 2020. And from what’s happening in the stock markets, the closely watched S&P 500 is on track to close out its worst first half in 52 years.
Courtesy of Mortgage Market Guide
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Wednesday – June 29, 2022
The final read on Q1 2022 Gross Domestic Product came in at -1.6% from -1.5% as recession fears loom. Right now, Q2 is forecasted at an anemic 0.3%. Q2 2022 GDP will be released on July 28. Recession signals have ramped up this week with the Consumer Confidence number falling hard as respondents expressed concern about energy and food costs as well as the future expectations.
After recently hitting highs seen in November 2008, mortgage rates eased in the MBA’s latest survey. The 30-year fixed-rate mortgage fell 14 basis points to 5.84% with 0.64 points for the week ended June 24, 2022, reports the MBA. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, gained 4.2%, the Refinance Index fell 3.1% and the Purchase Index was up 8%. Spokesperson Joel Kan said, “The decline in mortgage rates led to a slight increase in refinancing, driven by an uptick in conventional loans. However, refinances are still 80 percent lower than a year ago and over 60 percent below the historical average.”
Courtesy of Mortgage Market Guide
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Tuesday – June 28, 2022
Home price gains continue to remain at frothy levels given the low supply and still high demand. The S&P Case-Shiller 20-City Home Price Index rose 21.2% annually in April, up 1.8% monthly from March. The National Home Price NSA Index, covering all nine U.S. census divisions, rose 20.4% annually in April, down from 20.6% in the previous month, up 1.5% monthly. “Despite the deceleration of the National Composite and the modest acceleration for the 10- and 20-City Composites, these growth rates are extremely strong by historical standards – at or above the 99th percentile in all three cases,” said a spokesperson.
High inflation coupled with sky-high gas prices at the pumps and soaring food prices severely ate into the consumer confidence this month. The Conference Board reports that its Consumer Confidence Index fell to 98.7 this month from 106.4 in May and below the 100.4 expected. The report went on to show that 14.7% of consumers expect business conditions will improve, down from 16.4% while 29.5% expect business conditions to worsen, up from 26.4%. “Looking ahead over the next six months, consumer spending and economic growth are likely to continue facing strong headwinds from further inflation and rate hikes,” said said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
Planning on a barbecue for the 4th of July? You might be along with 74 million Americans this coming weekend. And what might you be serving? Well, burgers (85%), steak (80%), hot dogs (79%), chicken (73%) are the most popular foods for the grill. Americans will consume about 150 million hot dogs! 5% of the national beer consumption will take place over the 4th of July weekend, which is almost 70 million cases of beer. Let’s get out and proudly wear your Red, White and Blue to honor the greatest nation on earth!
Courtesy of Mortgage Market Guide
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Monday – June 27, 2022
Contract signings for home sales were down sizably last month from May 2021 but rose monthly as the sector deals with elevated borrowing costs. May Pending Home Sales were up 0.7% from April and above the -3.7% expected. Year-over-year contract activity fell 13.6%. A sale is listed as pending when the contract has been signed but has not yet closed. “Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition,” said NAR Chief Economist Lawrence Yun. “Contract signings are down sizably from a year ago because of much higher mortgage rates.”
Home flipping is hitting record levels as the sector remains solid despite the recent surge in borrowing costs. ATTOM reports its Q1 2022 U.S. Home Flipping Report revealed that 114,706 single-family houses and condominiums in the U.S. were flipped in Q1 representing nearly 10% of all home sales in Q1 2022. That’s almost 1 out of 10. The 10% is up from 6.9%, or one in every 14 home sales in Q4 2021 and from 4.9%, or one in 20 sales, in Q1 2021.
July 4 travel plans are ramping up and are ready to kick off ahead of the long holiday weekend which is also a big vacation week for many Americans. Motor Club AAA predicts 47.9 million people will travel 50 miles or more from home over the holiday weekend (June 30 – July 4). This is an increase of 3.7% over 2021 and just below those seen in 2019. The biggest surprise – car travel – will set a new record despite historically high gas prices with 42 million people hitting the road. With crowded roads and busy airports, AAA wants to prepare travelers so they can have a stress-free July 4th celebration.
Courtesy of Mortgage Market Guide
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