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What’s Ahead For Mortgage Rates This Week – October 9, 2023

October 9, 2023 by Joe Gonzalez

The previous week offered a blend of economic updates, covering a report on the jobs market and weekly changes in mortgage rates.

The Jobs Report Was Released
This week, the monthly jobs report was released by the United States Bureau of Labor and Statistics. It showed that the job market completely exceeded all expectations, adding 336,000 jobs during the month of September. That was far higher than the expected number of 170,000. It also represents a significant increase when compared to August, where the economy added a revised total of 227,000 jobs.

The unemployment rate remained relatively steady, coming in at 3.8 percent, which is the same as August. This jobs report is important because it could play a role in whether the Fed decides to raise interest rates in November or keep them the same. With the jobs growth exceeding all expectations, it could give the Fed reason to raise interest rates, as the Fed might believe the economy is still red hot and can tolerate higher interest rates.

A Shift in Mortgage Rates and Employment Dynamics
The 30-year fixed mortgage, the most popular in the United States, continues to trend upward. This week, the average 30-year fixed climbed to 7.8 percent, up significantly from 7.55 percent last week. This is also significantly higher than the rates were in August, which averaged around 7.15 percent. Some experts are stating that a potential rate of 8 percent is not out of the question.

The 15-year fixed mortgage rate has also continued to trend upward, albeit not as much. This week, the average rate for a 15-year fixed mortgage was 7.12 percent, up from 7.05 percent last week. This is still significantly higher than the 6.5 percent average that we saw in August.

It is clear that these rising mortgage rates are putting a damper on those looking to buy a home; however, it does not appear to have caused a major drop in housing prices, although its impacts could still be yet to come.

Consumer Sentiment: A Mild Dip
Consumer sentiment appears to be holding steady, with the current numbers coming in around 68.1. This is still a bit lower than the numbers were in August when they came in at around 69.5. At the same time, the overall sentiment of the current economic conditions continues to trend downward, coming in around 71.4, compared to 75.5 in August.

Consumers are still concerned about inflation and rising interest rates, which make it harder to make ends meet. It will be interesting to see how the jobs report impacts consumer sentiment moving forward.

Looking Forward
The Producer Price Index is due to be released next week, which is another key component of inflationary data. For now, all eyes will be on the Fed’s next meeting, which takes place in early November. The Fed will decide whether to raise rates or hold them steady for another cycle.

Filed Under: Financial Reports Tagged With: Case Shiller, Financial Report, Jobless Claims, Mortgage Rates

What’s Ahead For Mortgage Rates This Week – September 25, 2023

September 25, 2023 by Joe Gonzalez

What's Ahead For Mortgage Rates This Week - September 25, 2023Last week’s economic reports included readings on U.S. housing markets, housing starts and building permits, and the scheduled post-meeting statement from the Federal Open Market Committee of the Federal Reserve. Data on sales of previously owned homes were released along with weekly reports on mortgage rates and jobless claims.

National Association of Home Builders: Rising Mortgage Rates Shake Builder Confidence

Homebuilders lost confidence in U.S. housing market conditions in September. September’s index reading was 45 as compared to the expected reading of 49.5 and August’s reading of 50. The combination of rising mortgage rates and high home prices presented obstacles to first-time and moderate-income buyers, while homeowners delayed listing homes for sale while awaiting lower mortgage rates. Low inventories of previously owned homes for sale drove would-be buyers to consider purchasing new homes.

Home builders offered price cuts averaging 25 percent to buyers in August; the price cuts were deeper in September with cuts averaging 32 percent. The NAHB said 59 percent of home builders offered buyer incentives other than price cuts.

Building Permits Rise as Housing Starts Fall in August

The Commerce Department reported 1.54 million building permits issued in August as compared to 1.44 million permits issued in July. The August reading exceeded analysts’ expectations of 1.45 million building permits issued in August. Housing starts fell to 1.28 million starts in August as compared to July’s reading of 1.44 million starts and the expected reading of 1.43 million housing starts in August.

Sales of previously owned homes fell to 4.04 million sales in August as compared to July’s reading of 4.07 million sales and the expected reading of 4.10 million sales.

Fed Leaves Key Interest Rate Range Unchanged

The Federal Open Market Committee of the Federal Reserve announced its decision to leave the federal funds rate range unchanged at 5.25 to 5.50 percent, but policymakers hinted at another rate hike before the end of 2023. FOMC members review a variety of domestic and global financial and economic data to inform their decision-making process.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported fixed mortgage rates above 7 percent last week. The average rate for 30-year fixed-rate mortgages was one basis point higher at 7.19 percent. The average rate for 15-year mortgages rose by three basis points to 6.54 percent.

First-time jobless claims fell to 201,000 claims last week as compared to the previous week’s reading of 221,000 new claims and the expected reading of 225,000 claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on new home sales, S&P Case-Shiller home price indices,  the Federal Reserve Chair’s speech, and reports on inflation. Weekly readings on mortgage rates and jobless claims will also be released.

 

Filed Under: Financial Reports Tagged With: Case Shiller, Financial Report, Mortgage Rates

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