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What’s Ahead For Mortgage Rates This Week – August 21, 2017

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Last week’s economic readings included the National Association of Home Builders Housing Market Index and readings on housing starts and building permits issued. Consumer sentiment for August was reported by the University of Michigan. Weekly reports on mortgage rates and new jobless claims were also released.

NAHB: Builder Confidence Jumps 4 Points in August

Builder confidence in housing market conditions improved by four index points in August after reaching its lowest reading in eight months in July. Builder confidence rose in consideration of a strong labor market and overall economic growth. Obstacles including labor shortages, rising materials costs and a lack of buildable lots continued to present obstacles to builders producing homes at a pace sufficient to meet high demand and alleviate low inventories of homes for sale.

Housing starts were lower in July at a seasonally-adjusted annual rate of 1.155 million starts and fell short of 1.229 million starts. 1.223 million starts were reported in July. Single family home construction was higher as builders focus on meeting demand for single-family homes. Building permits issued in July were also lower at a seasonally-adjusted annual rate of 1.223 million permits issued as compared to July’s reading of 1,275 million permits issued.

Mortgage Rates Mixed, New Jobless Claims Lower

Average rates for fixed rate mortgages fell last week. 30-year fixed rate mortgage rates averaged 3.89 percent at one basis point lower than the previous week. Rates for a 15-year fixed rate mortgage averaged 3.16 percent and were two basis points lower than the previous week. The average rate for a 5/1 adjustable rate mortgage rose two basis points to 3.16 percent. Discount points averaged 0.40 percent for 30-year fixed rate mortgages, 0.50 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 232,000 new claims filed as compared to expectations of 241,000 new claims and 244,000 new claims filed the prior week.

August’s reading for the University of Michigan Consumer Sentiment Index was higher at 97.6 as compared to an expected reading of 94.8 and July’s index reading of 93.4. Growing consumer confidence could along with improving job markets and economic expansion could prompt renters to buy homes.

What‘s Ahead

This week’s scheduled economic reports include readings on sales of new and previously owned homes along with weekly readings on mortgage rates and new jobless claims.

Yes, You Should Take the Plunge and Buy a New Home in 2017. Here’s Why

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Yes, You Should Take the Plunge and Buy a New Home in 2017. Here's WhyAre you thinking about buying a house, apartment or condo? In many markets across the country, there’s never been a better time than now to become a homeowner. In this post, we’ll share a few reasons why the conditions are right to jump into the market and buy a new home.

Interest Rates Are Heading Up

If you’re like most home buyers, you’re probably looking to make use of mortgage financing to help spread out the purchase cost over a longer period of time. If so, you’ll want to make a move in 2017 so you can lock in a low interest rate. The Federal Reserve has indicated that interest rates are going to continue to rise over the next year or two. If that prediction holds true, mortgage costs will continue to grow along with rates. Buying in 2017 means that you’ll be able to secure a lower mortgage rate which in turn will save you money.

It’s A Buyer’s Market In Most Areas

Depending on the community that you’re looking to buy in, you may find that it’s a bit of a buyer’s market. There are a number of individuals looking to sell their homes to lock in the price appreciation that’s taken place during the recovery since the 2008 financial crisis. More listings on the market mean that sellers will be open to negotiation as they won’t want their home sale to take weeks or months. If you’re pre-approved for your mortgage financing and are serious about buying, you may be able to convince a seller to take a lower offer than they normally would.

You’ll Start Building Real Net Worth

Of course, one of the best parts of buying a home is that it’s a significant financial investment. Properly maintained, your home should continue to increase in value over time. As you continue to invest in upgrades and renovations, you’ll build more and more equity that can be used as leverage for additional credit or just pocketed when you eventually decide to sell. Even though every market has its ups and downs, owning real estate is a far greater path to prosperity than renting.

When you’re ready to get into the market and find your dream home, contact your trusted mortgage professionals.

NAHB: Builder Sentiment Surges in August

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Home builder confidence in housing market conditions surged in August after sagging to an eight-month low in July. The National Association of Home Builders reported a July reading of 68 in August after analysts expected a one- point increase from July’s Housing Market Index reading of 64. Any reading over 50 indicates that more builders consider housing market conditions positive than those who do not.

Component readings of the Housing Market Index also improved in August. Builder confidence in current housing market condition rose four points to 74; Builder confidence in housing market conditions over the next six months rose by five points to 78. Builder confidence in buyer traffic in new home developments rose one point to an index reading of 49.

Positive Economy Fuels Builder Confidence

Builders have long cited a shortage of buildable lots and labor, along with rising costs as impacting confidence in current and future confidence in housing markets. NAHB said that labor shortages are worse in 2017 than in 2016. Builders reported labor shortages including carpenters and electricians. August readings suggest that positive economic developments are mitigating long-term builder concerns, but a recent tariff on Canadian lumber raised materials costs for some builders.

The discrepancy between builder confidence and housing starts concerns real estate pros and housing and lending industry leaders, but without enough workers to staff their building crews, home builders face obstacles in meeting buyer demand for homes.

Stronger economic and jobs indicators are boosting builder confidence in housing market conditions. As more prospective home buyers find stable jobs, buying a home becomes possible for prospective buyers who have waited for economic conditions to improve sufficiently to invest in home ownership.

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