Last week’s economic reports included readings from the National Association of Home Builders on housing market conditions, Commerce Department readings on housing starts and building permits issued and National Association of Realtors® reporting on sales of previously-owned homes.
The Federal Reserve canceled the scheduled meeting of the Federal Open Market Committee and Fed Chair’s press conference, but the Fed did lower its target federal funds rate early in the week. Weekly readings on mortgage rates and initial jobless claims were also released.
Builder Confidence, Housing Starts and Building Permits Decrease
Builder confidence in housing market conditions dropped two index points to 72 in March. Readings over 50 indicate that most builders are confident about housing market conditions. Component readings of the Housing Market Index were also lower.
Builder confidence in current housing market conditions fell two points to 79; builder sentiment about housing market conditions within the next six months fell four points to 75 and builder confidence about buyer traffic in new housing developments dropped one point to 56.
NAHB Chief Economist Robert Dietz said that March readings were compiled before the coronavirus outbreak and that April’s readings would show more accurate impacts of the coronavirus on builder confidence. As state and local governments begin to restrict non-essential activity, home sales and buyer traffic readings will decline.
February housing starts fell to 1.599 million starts as compared to January’s reading of 1.624 million starts; analysts expected 1.493 million housing starts for February’s report. The Commerce Department also reported lower numbers for building permits issued. 1.464 million building permits were issued in February; analysts expected 1.500 million permits issued as compared to January’s reading of 1.550 million permits issued. Analysts expect the coronavirus to cause declines in housing starts and real estate activity in general as the virus spreads.
Mortgage Rates Rise as Fed Lowers Target Federal Funds Rate
The Federal Reserve canceled the scheduled meeting of its Federal Open Market Committee after announcing its decision to lower the target federal funds rate to 0.00 to 0.25 percent.
Freddie Mac reported higher mortgage rates last week as mortgage lenders worked through a backlog of refinancing applications. Rates for a 30-year fixed-rate mortgage averaged 3.65 percent and were 29 basis points higher. 15-year fixed-rate mortgages had an average rate of 3.06 percent, which was also 29 basis points higher than in the prior week. 5/1 adjustable-rate mortgage rates averaged 10 basis points higher at 3.11 percent.
Discount points averaged0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
First-time jobless claims jumped to 281,000 initial claims last week as employers closed and citizens were encouraged to limit non-essential activities. Unemployment claims will increase as more businesses close or reduce services.
The National Association of Realtors® reported rising sales of previously-owned homes with a seasonally adjusted annual pace of 5.77 million homes sold and was the highest reading for February sales since 2007. Home sales are expected to decrease as the coronavirus advances.
Open houses and home showings will decrease as stricter efforts to contain the coronavirus occur.
What’s Ahead
This week’s scheduled economic reports include readings on new home sales, inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.
Taking out enormous student loans to get a college degree may be a terrible idea for some. The burden of paying off this debt can make it far more challenging to do other important things like buying a home.
To refinance or not to refinance, that is the question. How do you know when it is an appropriate time to refinance? Many factors influence this decision, besides just the cost of the mortgage loan. Here is a checklist to follow when considering a refinancing opportunity.
Under the Jumpstart Our Business Startups (JOBS) Act, which was signed into law by President Obama on April 5, 2012, the Securities Exchange Commission (SEC) relaxed the rules about advertising investments. This allowed the trend of crowdfunding to expand dramatically giving real estate investors more opportunities for pooled-funds investing.
Last week’s scheduled economic reports included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
In the overwhelming majority of the 50 largest cities across the U.S., monthly rent is more than the mortgage payment for single-family homes. In several cases, much more. 
Recent advancements in technology continue to disrupt the real estate market. This includes the use of “Big Data” for data mining, artificial intelligence combined with machine learning, augmented and virtual reality, use of drones, blockchain technology, and the ongoing deployment of 5G.
There are many individuals who end up on a fixed income once they reach a certain age; however, their expenses aren’t always fixed. Sometimes, there is a large medical expense. In other cases, someone might need money for a new car or a home repair. In the event that someone needs cash quickly, one option is called a reverse mortgage.
The Realtor.com study looked at 593 counties across the country. As compared to the fourth quarter of 2018, the average monthly cost of renting a home increased 4%, up from $1,254, while the average monthly cost of homeownership actually declined 1%, falling from $1,658. These numbers represent exactly 30% of a homeowner’s gross income and 25% for renters, based on median household income. 
Home mortgage rates slipped to their lowest rates on record as uncertainty over the coronavirus continued to impact financial markets. Freddie Mac reported lower average mortgage rates for fixed and adjustable-rate mortgages.