What’s Ahead For Mortgage Rates This Week – August 29, 2016

Last week’s economic reports included readings on new and existing home sales, a speech by Fed Chair Janet Yellen, and a report on consumer sentiment. Weekly reports on mortgage rates and new jobless claims were also released.

New Home Sales Rise in July as Pre-Owned Home Sales Fall

Sales of new homes jumped in July to a seasonally-adjusted annual rate of 654,000 sales, which surpassed expectations of 579,000 sales and June’s downwardly-revised reading of 582,000 sales. This was the highest reading for new home sales since 2008 and represented a 31.30 percent increase since July 2015.

Builders were seen by analysts as addressing the need for more affordable homes; this trend contributes to a healthy housing market by supplying homes for a wider range of buyers. First-time buyers play a vital part in housing markets as their purchases enable current homeowners to buy larger homes or relocate.

Sales of pre-owned homes fell 3.20 percent to a seasonally-adjusted annual rate of 5.39 million sales as compared to expectations of 5.59 million sales and June’s reading of 5.57 million sales. Year-over-year, sales were 1.60 percent lower. Limited inventories of available pre-owned homes have narrowed buyer options; increasing prices and narrow choices were seen as factors contributing to lower sales. There was a 4.60 month supply of available homes in July. Real estate pros typically consider a six months a normal reading for homes on the market.

Lawrence Yun, chief economist for the National Association of Realtors®, noted that a slowdown in home appraisals may have contributed to July’s lower sales reading for pre-owned homes. Low mortgage rates prompted a surge in refinancing which created a backlog in home appraisals. While low mortgage rates may entice home buyers, stricter mortgage requirements can also keep prospective buyers at bay.

Federal Reserve Chair Janet Yellen indicated that the stage could be set for a federal rate increase as early as next month. If the Fed hikes its target federal funds rate, interest rates for consumer credit and mortgages can be expected to rise.

Mortgage Rates Hold Steady; New Jobless Claims Fall

Freddie Mac reported that fixed mortgage rates for 30 and 15-year loans were unchanged at 3.43 and 2.74 percent respectively. The average rate for a 5/1 adjustable-rate mortgage was one basis point lower at 2.75 percent. Discount points averaged 0.60, 0.50 and 0.40 percent.

New jobless claims were lower last week. 261,000 new jobless claims were filed against expectations of 264,000 new claims and the prior week’s reading of 262,000 new claims filed. Declining jobless claims can indicate strengthening labor markets, but can also indicate that workers are leaving the labor markets.

Consumer sentiment declined slightly in August due to concerns over the upcoming presidential election. Analysts expected a reading of 91.0 for August, but the reading for August was revised from 90.4 to 89.80.

What’s Ahead

Next week’s scheduled economic news includes reports on pending home sales, inflation, construction spending and consumer confidence. National unemployment, non-farm payrolls and ADP payrolls are also scheduled.

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18009 W Avenida Del Sol -- Surprise, AZ 85387

$459,180

4 Beds

3 Baths

2,476 SqFt

Status Active

MLS # 6681723

Property Type Single Family Residence

Price Type --

Come see the size of this master bedroom closet!! Trending to close at the end of March. An amazing layout with 4 bedrooms, and 3 baths w/ loft. In addition to being energy efficient and a Smart Home, the many upgrades make this one stand out. Great curb appeal, good size yard, great for entertaining. Two-tone paint, 9' ceilings. Nice Flagstone cabinets, granite kitchen and baths, island, and walk in pantry. Lots of room to cook and move around!

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10335 W Romley Road Tolleson, AZ 85353

$459,035

4 Beds

2 Baths

2,091 SqFt

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MLS # 6691222

Property Type Single Family Residence

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Brand New Home w/May Move-In. This Spacious Home Is Sure To Please All Family Members with Large Secondary Bedrooms, Owners Suite w/Spacious Walk In Closet & YES Wonderful Open Kitchen/Great Room Too, ''A MUST SEE''. New Home Sweet Home. Being Built w/4Bdrms, 2 Baths & 2 Car Garage & Double Gate+GORGEOUS KITCHEN With Amazing Island with Lots of Cabinets & Countertop Space, Stainless Steel Appliances, Upgraded Flagstone Cabinets, Gorgeous Quartz Kitchen Countertops, Double Door Pantry, 6x36 Wood Look Tile throughout except bedrooms. Nice Size Backyard for Future Oasis+ Includes Blinds & Garage Opener too. Energy Star & Smart Home Features + More. Visit our exciting community in Beautiful Tolleson! Pictures Are Interior/Exterior Photos Of Same Floor Plan/Other Omni Home, Options Will Vary

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Safford AZ 85546

$459,000

3 Beds

2.5 Baths

1,572 SqFt

Status Active

MLS # 6599750

Property Type Single Family Residence

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Horse Property & home that is ready for you to bring your family & your horses. The barn has 2 stalls with runs, 4 additional runs with feeders, wash station, tack room, half bath, two hitching posts, a 50' arena ring & large pasture. Also, on this 2.7 acre property located on the North side of the Gila River is a 1572 sq ft 3-bedroom, 2 bath well-built brick home that was remodeled in 2007. Large kitchen with island and wine cooler, granite counter tops & SS refrigerator. Nice tile floors in main areas, very large laundry room, plenty of storage, double pane windows and indoor shutters. There's a nice large workshop, fenced backyard, a fenced-in garden & raised garden beds as well. Plenty of parking areas too. This is certainly a must-see property to appreciate all that it has to offer!

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7950 E Starlight Way Scottsdale, AZ 85250

$459,000

2 Beds

2 Baths

1,266 SqFt

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MLS # 6608238

Property Type Apartment

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Great investment with Tenant in Place! Close to Old Town Scottsdale! Super clean updated unit has wide plank flooring, built-ins, walk-in closet, and a wood burning and updated fireplace. This open floor plan is all on one level. Full size washer and dryer, newer AC unit, remodeled master bathroom w/ jetted tub & separate shower. Rare to find a condo with this much outdoor space. living room & bedroom have exits on to large covered patio & backyard. Community boasts resort-style sparkling pool & spa. BBQ & ramada surrounded with deck chairs and tables. Across from 100-acre Chaparral Park & community center that features a fishing pier. There is also walking and bike pathways, a nearby dog park, sports courts, playground, and so much more!

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