Last week’s economic news included reporting on home builder confidence in national and regional housing markets, a post-meeting statement from the Federal Reserve’s Federal Open Market Committee, and Fed Chair Jerome Powell’s news conference. The National Association of Home Builders released its national and regional housing market indices. Weekly readings on mortgage rates and jobless claims were also published.

NAHB Housing Market Indices Reflect Slowing Growth in Housing Markets

June readings from the National Association of Home Builders showed slower growth in builder confidence in current and future U.S. housing markets. The NAHB reported the lowest reading in two years for June’s housing market indices as builder confidence fell for the sixth consecutive month. June’s index reading for the National Housing Market index fell two points to 67 and matched analysts’ forecasts. Readings over 50 indicate a majority of home builders are positive about housing market conditions.

NAHB chair Jerry Konter said, “Six consecutive monthly declines in home builder confidence is a clear sign of a slowing housing market in a high inflation, slow growth economic environment.” Mr. Konter also noted the impact of rising mortgage rates on entry-level and moderate-income home buyers: “Entry-level markets were particularly affected by declines in housing affordability…builders are adopting a more cautious stance as demand softens with higher mortgage rates.” Rising mortgage rates added to builders’ ongoing concerns with high materials costs and shortages of skilled workers.

NAHB’s regional homebuilder indices also declined with homebuilder sentiment in the West falling by nine points; the Midwestern regional index dropped by six points. Home builder sentiment decreased by two points in the South and by one point in the Northeast.

On Wednesday, the Federal Open Market Committee of the Federal Reserve announced that it would raise its benchmark interest rate range by 0.75 percent in its attempts to slow inflation. The Federal Reserve has a dual mandate of maintaining inflation at or near two percent and achieving maximum employment. The Fed is expected to raise its key rate range into 2024 in its efforts to ease inflation.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported a jump in average mortgage rates last week after the Fed announced its decision to raise its benchmark interest rate range to 0.75 to 1.00 percent. This was the highest federal funds range increase since 1981. The average rate for 30-year fixed-rate mortgages rose by 55 basis points to 5.78 percent; the average rate for 15-year fixed-rate mortgages rose by 43 basis points to 4.81 percent. The average rate for 5/1 adjustable rate mortgages rose by 21 basis points to 4.33 percent. Discount points averaged 0.90 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 229,000 first-time claims filed last week as compared to the prior week’s reading of 232,000 first-time claims filed and the expected reading of 220,000 new jobless claims filed. Last week’s reading for continuing jobless claims was unchanged with 1.31 million ongoing claims filed.

What’s Ahead

This week’s scheduled economic news includes readings on sales of previously owned homes and testimony by Fed chair Jerome Powell to the Senate Banking Committee and the House Financial Services Committee. The University of Michigan will release its monthly index reading on consumer sentiment and weekly readings on mortgage rates and jobless claims will also be released. 

Last week’s economic reporting included readings on new and pending home sales, minutes from the Federal Reserve’s recent Federal Open Market Committee meeting, and data on inflation. Weekly readings on mortgage rates and jobless claims were also released.

New and Pending Home Sales Fall

The annual pace of new home sales fell in April according to the Commerce Department. Year-over-year sales of new homes fell to a pace of 591,000 sales as compared to the March reading of 709,000 sales of new homes. Analysts expected a year-over-year pace of 750,000 new home sales in April. Rising home prices and mortgage rates challenged first-time and moderate-income home buyers, which caused falling sales.

Readings for pending home sales fell by -3.90 percent in April; analysts expected a reading of -2.00 percent based on the March reading of -1.60 percent. High home prices and recently rising mortgage rates cooled prospective buyers’ interest as concerns over rising inflation and economic conditions sidelined low and moderate-income home buyers. Lawrence Yun, the chief economist for the National Association of Realtors®, said that rising mortgage rates have increased monthly mortgage payments by as much as $500. A secondary effect of fewer home sales is fewer sales of goods and services associated with home ownership.

The Federal Reserve’s Federal Open Market Committee minutes documented the Fed’s decision to raise its key interest rate range to 0.75 to 1.00 percent. FOMC members expect ongoing rate range increases as the Fed continues its efforts to control inflation.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average mortgage rates for the second consecutive week. Rates for 30year fixed rate mortgages fell by 15 basis points to 5.10 percent and rates for 15-year fixed rate mortgages fell by 12 basis points to 4.31 percent.  The average rate for 5/1 adjustable rate mortgages rose by 12 basis points to 4.20 percent. Discount points averaged 0.90 percent for 30-year fixed-rate mortgages and 0.80 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgage rates averaged 0.30 percent.

New jobless claims fell to 210,000 claims filed from the prior week’s reading of 218,000 initial claims filed. Analysts expected 215,000 new jobless claims. Continuing jobless claims rose to 1.35 million ongoing claims filed as compared to 1.32 million ongoing claims filed.

The University of Michigan’s Consumer Sentiment Index fell to an index reading of 58.40 in May as compared to April’s reading of 59.10. Readings over 50 are considered positive.

What’s Ahead

This week’s scheduled economic reports include readings on home prices and construction spending along with labor sector readings on job growth and the national unemployment rate.

Last week’s economic reporting included readings and forecasts on inflation and the University of Michigan’s preliminary consumer sentiment survey. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Reports: Mixed Results for April

Commerce Department readings on consumer inflation showed mixed results in April; the Consumer Price Index dropped to 0.30 percent growth from the March reading of 1.20 percent inflation. Analysts expected 0.30 percent growth from March to April. The Core Consumer Price Index, which excludes volatile food and fuel sectors, rose by 0.60 percent in April as compared to the March reading of 0.30 percent growth. Analysts expected April’s reading for the Core Consumer Price Index to rise by 0.40 percent.

Year-over-year inflation dipped to 8.30 percent in April as compared to the March reading of 8.50 percent. This was the first decline in eight months and was caused by lower fuel prices. Analysts expected a year-over-year inflation rate of 8.10 percent for April. The year-over-year reading for the Core CPI, which excludes food and fuel sectors, showed  6.20 percent growth as compared to the March reading of 6.40 percent. The University of Michigan forecasted an inflation rate of 3.00 percent in the next five years.

Mortgage Rates, Jobless Claims Mixed

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by three basis points to 5.30 percent; the average rate for 15-year fixed-rate mortgages fell by four basis points to 4.48 percent. The average rate for 5/1 adjustable-rate mortgages rose by two basis points to 3.98 percent. Discount points averaged 0.90  percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.

First-time jobless claims rose to 203,000 new claims filed last week as compared to 202,000 initial claims filed in the prior week. Continuing jobless claims were lower last week with 1.34 million ongoing claims filed; 1.39 million claims were filed during the prior week.

The University of Michigan released the preliminary edition of its Consumer Sentiment Index for May; consumer sentiment dropped to an index reading of 59.10 percent for May as compared to April’s reading of 65.20 percent. The war in Ukraine and high fuel prices continued to contribute to consumer skepticism about current economic conditions.

What’s Ahead

This week’s scheduled economic reports include homebuilder readings on housing market conditions, Commerce Department reports on building permits issued and housing starts are also scheduled. The National Association of Realtors® will release data on sales of previously-owned single-family homes. Weekly readings on mortgage rates and jobless claims will also be released.

Last week’s economic reporting included readings from S&P Case-Shiller Home Price Indices, the Federal Housing Finance Agency House Price Index, and the Commerce Department on sales of new homes. Weekly readings on mortgage rates and jobless claims were also reported.

S&P Case-Shiller, FHFA Report Near-Record Home Price Growth

February home prices continued their rapid growth, but analysts hinted at a coming slowdown in-home price growth as would-be buyers were faced with rising mortgage rates and affordability concerns. S&P Case-Shiller’s National Home Price Index reported year-over-year home price growth of 19.80 percent as compared to January’s national home price growth rate of 19.10 percent. The 20-City Home Price Index reported the top three cities for year-over-year home price growth were Phoenix, Arizona with 32.90 percent growth, Tampa, Florida reported 32.60 percent growth in home prices, and Miami, Florida reported year-over-year home price growth of 29.70 percent. All cities reported in the 20-City Home Price Index had double-digit growth in February and the pace of home price growth was faster for all 20 cities than in January.

In related news, the Federal Housing Finance Administration reported that home prices for homes owned by Fannie Mae and Freddie Mac rose by 19.40 percent year-over-year and were 2.10 percent higher month-to-month. 

Pending home sales were lower in March by -1.20 percent, as compared to the expected reading of -1,80 percent and February’s reading of -4.00 percent. Rising inflation and home prices created affordability concerns for first-time and moderate-income homebuyers.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported a lower average rate for 30-year fixed-rate mortgages dropped by one basis point to 5.10 percent; rates for 15-year fixed-rate mortgages averaged 4.40 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.78 percent and three basis points higher. Discount points averaged  0.80 percent for 30-year fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.

New jobless claims fell last week with 180,000 initial claims filed as compared to 185,000 first-time claims filed in the previous week. Continuing jobless claims held steady with 1.41 million ongoing claims filed and matched the prior week’s reading.

The University of Michigan’s Consumer Sentiment Index fell by one-half point in April with an index reading of 65.2. The expected reading of  65.7 matched the March reading. Concerns over rising inflation, fuel prices, and the war in Ukraine contributed to lower consumer sentiment.

What’s Ahead

This week’s scheduled economic news includes readings on public and private-sector jobs growth, the national unemployment rate, and a news conference by Fed Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims will also be published.

Last week’s economic reporting included readings on monthly and year-over-year inflation and the preliminary reading on consumer sentiment from the University of Michigan. Weekly readings on mortgage rates and jobless claims were also released.

Gas Prices Drive High Inflation in March

Consumers felt near-record pain at the pump in March as gas prices continued to rise. Month-to-month inflation increased by 1.20 percent in March as compared to February’s month-to-month inflation rate of 0.80 percent. Analysts expected inflation to rise by 1.10 percent in March. The extent of rapidly rising gasoline prices on inflation is evident when comparing readings for the Consumer Price Index and the Core Consumer Price Index, which excludes food and fuel prices. The month-to-month Core Consumer Price Index reading for March was 0.30 percent; analysts predicted a reading of 0.50 percent growth, which matched February’s reading.

Year-over-year Consumer Price Index readings showed 8.50 percent inflation, which exceeded the expected reading of 8.40 percent, and February’s year-over-year reading of 7.90 percent growth in inflation. The year-over-year core   Consumer Price Index rose to 6.50 percent in March and matched analyst expectations based on February’s year-over-year core inflation reading of 6.40 percent.

Mortgage Rates, New Jobless Claim Rise

Freddie Mac reported the average rate for 30-year fixed-rate mortgages rose by 28 basis points to 5.00 percent last week; rates for 15-year fixed-rate mortgages averaged 4.17 percent and were 26 basis points higher on average. Rates for 5/1 adjustable rate mortgages averaged 3.16 percent and averaged 13 basis points higher than in the previous week. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, and 0.90 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

First-time jobless claims rose to 185,000 new claims filed, which surpassed expectations of 172,000 new claims filed and the previous week’s reading of 167,000 new jobless claims filed. 1.48 million ongoing jobless claims were filed as compared to the previous week’s reading of 1.52 continuing jobless claims filed.

The University of Michigan released its Consumer Sentiment Index for April with an index reading of 65.7 as compared to the expected index reading of 64.1 and the March index reading of 59.4.

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders on housing markets, federal government readings on housing starts, and building permits issued. Weekly reporting on mortgage rates and jobless claims will also be released.

Last week’s economic news included remarks given by Federal Reserve Board Governor Lael Brainard and the release of the minutes of the most recent meeting of the Fed’s Federal Open Market Committee. Weekly readings on mortgage rates and jobless claims were also released.

Federal Reserve Leaders Prepared to Address Inflation

Lael Brainard, a Governor of the Federal Reserve Board, addressed the central bank’s concerns over rapidly rising inflation in her remarks made at a financial conference in Minneapolis, Minnesota. “Currently, inflation is much too high and is subject to upside risks. It is of paramount importance to get inflation down” Ms. Brainard concluded. “The Fed is prepared to take further action if inflation indicators and expectations indicate that such action is warranted.”

Ms. Brainard described the Fed’s strategy for controlling inflation as a series of interest rate increases and rapid reductions to the Fed’s balance sheet that may occur as soon as the Federal Open Market Committee meets in May.

Federal Open Market Committee Meeting Minutes Indicate Plan for Slowing Inflation

Minutes of the March meeting of the Fed’s Federal Open Market Committee outlined the Fed’s plans for controlling runaway inflation. The plan is not set in stone yet, but “many” FOMC members were on board with the proposals for reducing the Fed’s portfolio by $95 billion a month after three months and raising the Fed’s key interest rate by 0.25 percent during future FOMC meetings. Committee members originally planned to raise the Fed’s interest rate by 0.50 percent at each meeting but reduced proposed rate hikes to 0.25 percent due to the potential impact of the war in Ukraine.

Mortgage Rates Rise, Jobless Claims Data Mixed

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by five basis points to 4.72 percent; the average rate for 15-year fixed-rate mortgages rose by eight basis points to 3.91 percent. Rates for 5/1 adjustable rate mortgages rose by six basis points and averaged 3.56 percent. Discount points held steady and averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Fewer new jobless claims were filed last week than in the prior week with 166.000 new claims filed as compared to 171,000 initial claims filed in the previous week. Continuing jobless claims inched up with 1.52 million ongoing jobless claims filed as compared to the previous week’s reading of 1.51 million continuing claims filed.

What’s Ahead

This week’s scheduled economic news includes multiple readings on monthly and year-over-year inflation and the University of Michigan’s consumer sentiment index. Weekly readings on mortgage rates and jobless claims will also be published. 

Last week’s financial and economic reporting included readings from S&P Case-Shiller Home Price Indices, the  Federal Housing Finance Agency and the federal government reported on construction spending. Reports on public and private-sector jobs growth and the national unemployment rate were also published along with weekly readings on mortgage rates and jobless claims.

S&P Case-Shiller: Home Price Growth Expected to Slow in 2022

National home prices grew by 19.20 percent year-over-year in January as compared to December’s year-over-year pace of 18.90 percent according to the monthly S&P Case-Shiller National Home Price Index. The 20-City Home Price Index revealed no change in the metro areas holding the top three spots for home price growth. Phoenix, Arizona topped the list with year-over-year home price growth of  32.60 percent; Tampa, Florida followed with a year-over-year home price growth of 30.8 percent, and Miami, Florida reported year-over-year home price growth of 28.10 percent. Analysts expect home price growth to slow in 2022 and into 2023. Affordability concerns and rising mortgage rates sidelined first-time and modest-income buyers in high-demand metro areas where multiple offers and cash buyers competed with buyers financing their home purchases.

In separate reporting, the Federal Housing Finance Agency also reported higher home price growth for single-family homes owned by Fannie Mae and Freddie Mac. Year-over-year home prices grew by 18,20 percent in January as compared to December’s home price growth rate of  17.70 percent.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 25 basis points to 4.67 percent. Rates for 15-year fixed-rate mortgages averaged 3.83 percent and 20 basis points higher than in the previous week. 5/1 adjustable-rate mortgages averaged 3.50 percent and were 14 basis points higher on average. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims rose last week with 202,000 new claims filed; analysts expected 195,000 new claims and 188,000 new claims were filed in the previous week. Continuing jobless claims fell with 1.31 million ongoing claims filed as compared to 1.34 million continuing jobless claims filed in the previous week.

Construction Spending, Jobs Growth Fall in February

The Commerce Department reported less construction spending in February than in  January. Spending rose by 0.50 percent as compared to the expected reading of 1.0 percent and January’s construction spending growth of 1.60 percent.

The federal government’s Non-Farm Payrolls report indicated that 431,000 public and private-sector jobs were added in March as compared to the expected reading of 490, 000 jobs and February’s reading of 750,000 jobs added. ADP reported 455,000 private-sector jobs added in March as compared to an expected reading of 450,000 jobs added and 486,000 private-sector jobs added in February. The national unemployment rate dropped from 3.80 percent to 3.60 percent in March.

What’s Ahead

This week’s scheduled economic reporting includes the release of the Federal Open Market Committee’s minutes from its last meeting and weekly readings on mortgage rates and jobless claims.

Last week’s economic reporting included a speech and press conference by Federal Reserve chair Jerome Powell, data on pending home sales and sales of new homes, and the University of Michigan’s monthly reading on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also published.

Fed Chair: Rate Hikes Above 0.25 Percent May be Needed to Ease Inflation

Federal Reserve chair Jerome Powell said that the Fed is willing to move beyond its recent 0.25 percent rate hike to control inflation.  In a speech made to the National Business Association for Business Economics, Mr.Powell said, “We will take necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at  a meeting or meetings, we will do so.” Mr. Powell clarified that the Fed is willing to raise rates as needed to control inflation. He predicted that the Fed would raise its key interest rate to 1.90 percent this year and 2,8 percent in 2023.

Mortgage Rates Rise Again as Sales of New Homes Fall

Freddie Mac reported higher mortgage rates last week as rates for 30-year fixed-rate mortgages rose 26 basis points and averaged 4.42 percent; the average rate for 15-year fixed-rate mortgages rose by 24 basis points to 3.63 percent. The average rate for 5/1 adjustable rate mortgages rose by 17 basis points to 3.36 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The combined impact of rising home prices and mortgage rates caused sales of new homes to fall in February.  772,000 new homes were sold on a seasonally-adjusted annual basis as compared to expectations of 805,000 sales and January’s reading of 788,000 new homes sold.

Initial jobless claims fell last week to 187,000 claims filed as compared to expectations of 210,000 new claims filed and the prior week’s reading of 215,000 first-time jobless claims filed. Continuing jobless claims fell to 1.35 million filings as compared to the previous week’s reading of 1.42 million jobless claims filed on a seasonally-adjusted annual basis.  

The University of Michigan’s final Consumer Sentiment Index for March showed consumer skepticism about current economic conditions. The March index reading was 59.4 as compared to the expected reading of 59.7, which matched February’s index reading for consumer sentiment.

What’s Ahead

This week’s scheduled economic reporting includes readings from Case-Shiller Home Price Indices, The Federal Housing Finance Administration’s House Price Index, and data on public and private-sector jobs growth. The national unemployment rate will be published along with weekly readings on mortgage rates and jobless claims.