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Daily Rate Update: March 29th-April 2nd

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Thursday – April 1, 2021

Home borrowing costs were essentially unchanged this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 3.18% from 3.17% with 0.7 in points and fees. A year ago at this time, the rate was not much higher at 3.33%. It is up from 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “We even see that purchase demand is diminished today as compared to late May and early June of 2020, when mortgage rates were the same level. This is confirmation that while purchase demand remains strong, the marginal buyer is feeling the affordability squeeze resulting from the increases in mortgage rates and home prices we’ve experienced in recent months.”

First-time unemployment claims increased in the latest week but the numbers have been on a downward slope. Weekly Initial Jobless Claims rose by 719,000 from 658,000 for the week ended March 27, 2021. To put it into perspective the week of March 14, 2020 claims were 282,000. The week of March 21, 2020, they skyrocketed to 3.3 million as lockdowns took hold. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 3.79 million from 3.84 million. With more and more states reopening their economies, many unemployed Americans should be able to go back to work.

The U.S. economy continues to grow with positive news from the manufacturing sector. The ISM National Manufacturing Index rose to 64.7 in March, the highest reading since 1983. Any number over 50 indicates expansion, below 50 contraction. Within the data, it showed gains for new orders, production and employment. The report also revealed that due to COVID-19 constraints, those surveyed reported that their companies and suppliers continue to struggle to meet increasing rates of demand.

Courtesy of Mortgage Market Guide 

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Wednesday – March 31, 2021

Private payrolls surged in March as the labor market continues to improve as the remaining closed states reopen. The March ADP Private Payrolls report saw 517,000 new jobs created in the private sector, well above the 176,000 created in February. It was the largest gain since September. Nela Richardson, chief economist, ADP said, “Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available.”

The White House is set to roll out its massive infrastructure plan today with signs of big tax hikes within the details. The new package could be in the $5T area with it split between two plans. Tax hikes to businesses and individuals will be in the spending package. Also, the bill calls for funds for U.S. transportation infrastructure, water systems, broadband and manufacturing.

After weeks of higher rates, home borrowing costs declined in the latest week and remain at historically low levels. The MBA reports that the 30-year fixed-rate mortgage fell three basis points to 3.33% with 0.39 in points for the week ended March 26, 2021. The Market Composite Index, a measure of total mortgage loan application volume fell 2.2%, the Purchase Index declined by 1.5% while the Refinance Index fell 2.5%. Spokesperson Joel Kan said, “Inadequate housing inventory continues to put upward pressure on home prices. As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up.”

Courtesy of Mortgage Market Guide 

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Tuesday – March 30, 2021

Redfin reports that the median home price rose 16% annually to a record-high of $331,590 for the week ended March 21. The number of homes listed for sale on the market at any point during the period declined fell 42% from 2020 to a new all-time low. Redfin Chief Economist Daryl Fairweather said, “When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans.”

There is a huge government spending package due out this week while investors will be closely watching two key labor market reports for March with a holiday-shortened trading week. The ADP Private Payrolls Report will be released on Wednesday and the government Jobs Report for March will be delivered on Friday. The bond markets will close early on Friday at noon ET while stocks are closed for the session in observance of Good Friday. The Biden Administration is set to unveil a $3 trillion infrastructure package this week aimed at spurring on the economy, reduce carbon emissions and narrow economic inequality.

Courtesy of Mortgage Market Guide 

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Monday – March 29, 2021

Redfin reports that the median home price rose 16% annually to a record-high of $331,590 for the week ended March 21. The number of homes listed for sale on the market at any point during the period declined fell 42% from 2020 to a new all-time low. Redfin Chief Economist Daryl Fairweather said, “When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans.”

There is a huge government spending package due out this week while investors will be closely watching two key labor market reports for March with a holiday-shortened trading week. The ADP Private Payrolls Report will be released on Wednesday and the government Jobs Report for March will be delivered on Friday. The bond markets will close early on Friday at noon ET while stocks are closed for the session in observance of Good Friday. The Biden Administration is set to unveil a $3 trillion infrastructure package this week aimed at spurring on the economy, reduce carbon emissions and narrow economic inequality.

Courtesy of Mortgage Market Guide 

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