Shelter Six: Strong Economic Data Putting Pressure on Mortgage Rates

January Existing-Home Sales increased for the seventh time in eight months and were a whopping 24% higher than a year ago.

The Median National Existing-Home price was $303,900, 14% higher than last January.

Inventory levels, however, remained at a 1.9-month supply nationally, down 26% from a year ago.

Retail Sales jumped a shocking 5.3% from December, much more than expected, and at the 4th fastest pace since records began in the early 1990’s.

The bad weather in Texas has taken almost 40% of the U.S. crude oil production offline, which contributed to oil prices pushing to the highest level since before the pandemic.

Oil prices, as well as last week’s very strong Producer Price Index figures, have both caused concerns that inflation will take rates higher.

Rate Update

Mortgage rates jumped nearly 25% last week on the heels of strong economic data, inflation concerns, improving Covid numbers, and an impending large stimulus package. Rates are up to the highest level in three months but still extremely low.

This Week

Markets will be listening to Fed Chair Jerome Powell this week, as he delivers his semi-annual update to Congress. Personal Income and the Core PCE Price Index will also be released on Friday.

February 22, 2021 by · Leave a Comment

Shelter Six:  Potentially More Homeowners Willing to List

Fannie Mae’s monthly consumer survey indicated that 57% of people contacted said they felt it was a good time to sell a home, up from 7% in December.

The median price of a single-family home climbed 14.9% to $315K over the 4th Quarter, the fastest pace since the data first started being kept in 1990.

Non-US citizens classified under the Deferred Action for Childhood Arrivals (DACA) are now eligible for FHA mortgages as long as they have a valid SSN and proof of eligibility to work in the U.S.

With existing forbearance plans about to start expiring in March, the forbearance period on Conforming loans has been extended by three additional months to 15 months.

Last week’s key inflation report came in lower than expected as January’s Core CPI was just 1.4% higher than a year ago (was 1.6% last month and 2.3% last year).

Oil prices continue to quietly tick higher, a sign that mortgage rates will also eventually follow their lead.

Rate Update

It was a quiet week for mortgage rates. Mortgage News Daily’s Conforming Purchase Average 30-Year Fixed-Rate ended last week at 2.86%.

This Week

Retail Sales will be released on Wednesday, Housing Starts on Thursday, and Existing Home Sales on Friday.

February 15, 2021 by · Leave a Comment

Shelter Six:  Strong Data Points to Economic Recovery

There was lots of positive economic data last week that hints toward further economic recovery and growing home sales.

The Unemployment Rate surprisingly dropped to 6.3% in January from 6.7% a month earlier.

The economy gained 49K jobs in January, not a huge number but not bad for January when job gains are traditionally lower.

There were strong reports from both the manufacturing and services sectors of the economy.

Oil prices are now at the highest point in a year, which could put pressure on rates, but higher energy prices are typically an underlying sign of a recovering economy.

The number of jobless claims dropped for the third week in a row, another positive trend.

Rate Update

It was a quiet week for mortgage rates with little change. Friday’s Mortgage News Daily Conforming Purchase Average 30-Year Fixed-Rate was 2.85%.

This Week

In a light week for economic reports, the Consumer Price Index (CPI) will come out on Wednesday.

February 8, 2021 by · Leave a Comment

Shelter Six:  15% of Those Surveyed Plan to Buy a Home This Year

Last week’s Federal Reserve meeting produced no surprises and the reaction was minor. Most importantly, the Fed made no changes to its bond purchase program.

Good news for rates. A key inflation report showed December inflation 1.5% higher than a year ago, but still well below the Fed’s 2% target.

The NAHB reports that the % of homebuyers considering purchasing a home within the next year took the largest jump in a year since they have been tracking the metric.

In the 4th Quarter of last year, 15% of those surveyed said they are considering purchasing a home within the next 12 months, up 4% from the previous year.

December New Home Sales were 15% higher than last year, while Pending Home Sales were 21% higher and at the highest level ever recorded during December.

For your new construction buyers, Shelter now offers long-term, fixed-rate locks up to 360 days.

Rate Update

Despite growing volatility mostly due to stock market volatility, mortgage rates were flat last week and remain near all-time lows.

This Week

The National Manufacturing Index will be released on Monday, the National Services Index on Wednesday, and Employment figures on Friday.

February 1, 2021 by · Leave a Comment

Shelter Six: Fabulous Housing Stats from December

After falling in November, December Existing-Home Sales unexpectedly increased slightly and were 22% higher than last December.

The December National Median Existing-Home Price ($314,300) was 13.5% higher than a year ago, the 106th straight month of year-over-year appreciation.

Inventory levels were down 23% from a year ago with the number of homes for sale at a record-low 1.9-month supply nationally (6 months considered a healthy level).

December Single-Family Housing Starts unexpectedly rose 12% from November and were 28% higher than a year ago.

Single-Family Building Permits, a leading indicator of future construction, increased 8% from November and were a stunning 30% higher than a year ago.

Fannie Mae’s first Economic and Housing Outlook of the year predicts that 2021 home sales will be up 3.8% and purchase origination volume will be up $200 Billion.

Rate Update

Mortgage rates slid back down near all-time lows last week. Friday’s Conforming Purchase Average 30-Year Fixed-Rate, per Mortgage News Daily, was down to 2.8%.

This Week

The Federal Reserve meets on Wednesday and investors will be listening closely for comments about the Fed’s bond purchase program plans. The Core PCE Price Index is due out on Friday.

January 25, 2021 by · Leave a Comment

Shelter Six: Fed’s Commitment to Buying Bonds Should Keep Rates Low

Investors are clearly very optimistic that government stimulus and vaccines are going to lead to a fast economic recovery.

December Retail Sales fell a disappointing.7% from November. Retail Sales plunged after the pandemic, then rallied for two months, but have been more-or-less flat since.

Recent upward pressure on rates stems from the new bonds that will need to be issued to fund government stimulus, which is believed will cause inflation to rise.

There was evidence last week that inflation is not an issue yet, however, as December’s Core Consumer Price Index was just 1.6% higher than a year ago and unchanged from November.

The Fed clarified last week that it does not plan to slow down its level of bond buying until employment is stronger and inflation is rising at a more substantial level.

The Fed’s commitment to buying bonds should keep rates down around 3% for some time.

Rate Update

Despite growing market volatility and headlines that rates are rising, rates were actually unchanged last week.

This Week

Housing Starts will be released on Thursday and Existing Home Sales on Friday.

January 18, 2021 by · Leave a Comment

Shelter Six: Strong Economic Data Overshadows Weak Jobs Report

The economy lost 140K jobs in December. This was more than expected as 75K jobs had been expected to be gained.

The Unemployment Rate remained at a flat 6.7%.

Average Hourly Earnings rose .8% from November to an impressive 5.1% higher than a year ago.

The ISM National Manufacturing Index jumped to 60.7 in December, well above the consensus forecast of 56.5, and to the highest level since August 2018.

The ISM National Services Index rose to 57.2, well above the consensus forecast of 54.5, and near the levels seen early in the year prior to the pandemic. Readings above 50 indicate that the sector is expanding.

MBA Forbearance figures remained at 5.53% of all loans, as of Dec 27 (they peaked at 8.55% on June 7). This represents about 2.7M loans actively in forbearance.

Rate Update

Mortgage rates pushed up .125% last week but, with no changes to the Fed’s bond purchase program in sight, rates are expected to stay near low levels in 2021.

This Week

The Consumer Price Index (CPI) will come out on Wednesday and Retail Sales on Friday.

January 11, 2021 by · Leave a Comment

Shelter Six: Cash Sales Drop to Lowest Level in 13 Years

Last week, Congress passed a $900B Covid Relief Bill which includes supplemental unemployment benefits of $300 per month and direct payments to qualifying individuals of $600 per month.

With vaccines already rolling out and more economic stimulus expected, the financial markets remain optimistic about the future, as evidenced by a rising stock market.

Pending home sales slid for the 3rd straight month in November, but the small 2.6% decline was largely due to the shortage of inventory and fast-rising home prices.

According to Lawrence Yun, NAR’s chief economist, “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”

The share of cash sales was down to 24% in 2020, the lowest level in 13 years according to a new report from Redfin.

Over the last 20 years, the lost point for cash sales was 20.7% in 2006 and the high point was 34% in 2013. The main reason for the decline is people taking advantage of low rates.

Rate Update

Mortgage rates remain near all-time lows and, with no changes to the Fed’s bond purchase program in sight, rates are expected to stay near low levels over the 1st Quarter.

This Week

The ISM National Manufacturing Index will be released on Tuesday, the ISM National Services Index on Thursday, and the monthly Employment figures on Friday.

January 4, 2021 by · Leave a Comment

Shelter Six: Existing-Home Sales 26% Higher Than a Year Ago

The President signed the $900B Covid-19 Relief Bill into law on Sunday, keeping the US Government running, including USDA programs, through next September.

November Existing-Home Sales, after five months of healthy gains, decreased 2.5% from October to an annual rate of 6.69M, 26% higher than a year ago.

November New-Home Sales fell .9% to 845K units.

National Listing Inventory dropped to a record-low 2.3-month supply, 22% lower than a year ago.

National days-on-the-market slipped to 21 days, down from 38 days last November (73% of homes sold were on market for less than a month).

The National Median Existing-Home Price surged to $310,800, 15% higher than a year ago (105th straight month of year-over-year appreciation).

Rate Update

Mortgage rates continue to hold steady near all-time lows and this week between Christmas and New Year’s should be a quiet one.

This Week

The October S&P Case-Shiller Home Price Index will be released on Tuesday, the Pending Home Sales Index on Wednesday, and Jobless Claims on Thursday.

December 28, 2020 by · Leave a Comment

Shelter Six: Fed Meeting Brings Little Drama to Markets

Last week’s Federal Reserve Meeting produced little drama and reaction as it contained no significant market-moving announcements.

November Retail Sales were down 1.1% from October as rising coronavirus cases halted consumer spending early in the crucial holiday shopping season.

November Single-Family Housing Starts were up 22% over a year ago and at the best level since 2007.

New Construction continues to become more expensive and a primary reason is the price of lumber, which presently sits about twice as high as before the pandemic.

According to Ellie Mae’s Origination Insight Report, the time to close a mortgage industry-wide increased in October to 49 days for a purchase and 59 days for a refi.

Shelter’s turn times continue to run 25-30 days for a purchase around 40 days for a refinance. We would love to help you with your refi while rates are still low!

Rate Update

Amazingly, mortgage rates have trickled down even further over the last week to yet a new all-time low level.

This Week

Existing Home Sales will be released on Tuesday and both New Home Sales and the Core PCE Price Index will come out on Wednesday.

December 21, 2020 by · Leave a Comment

Next Page »