What’s Ahead For Mortgage Rates This Week – October 3, 2016

Last week’s economic releases included reports on new and pending home sales, S&P Case-Shiller Home Price Indices and regularly scheduled weekly reporting on mortgage rates and weekly jobless claims. Readings on consumer sentiment and confidence were also released.

New and Pending Home Sales Lower as Peak Sales Season Winds Down

August readings for new and pending home sales were lower than for July; analysts said that slim supplies of available homes and rising home prices contributed to slower home sales. Peak home sales typically occur during spring and summer. Homebuyers with school-aged children prefer to be settled into a new home when school starts in August and September.

According to the Commerce Department, new home sales achieved their second highest reading since the Great Recession. Although lower than July’s reading, August sales of new homes reached 609,000 on a seasonally-adjusted annual basis. Analysts expected a reading of 600,000 new home sales based on July’s reading of 659.000 new homes sold. August’s reading was 20.60 percent higher year-over-year. High demand for homes appears to be kicking home builders into higher gear as they strive to ease slim inventories of available homes.

The impact of short inventories of available homes was reflected in August’s reading for pending home sales. Home sales awaiting closing fell in August from July’s reading of +1.20 percent in July to 2.40 percent in August. The National Association of Realtors® said that home sales are declining due to very limited inventories of available homes. Rapidly rising home prices and strict mortgage qualification requirements also contributed to slipping sales. After home buyers sign a purchase contract, they are at the mercy of changing mortgage rates their ability to qualify for a mortgage. Pending home sales supply an indication of future closings and mortgage loans.

According to the S&P Case-Shiller 20-City Home Price Index for July, home price growth dipped from June’s seasonally adjusted annual rate of 5.10 percent to 5.00 percent. Slim inventories of homes for sale and high demand were again cited as primary reasons for slower home price growth. While demand is high, slim supplies of available homes can cause would-be buyers to postpone their home search until more homes are on the market.

Mortgage Rates Fall, New Jobless Claims Rise

Mortgage rates fell across the board last week according to Freddie Mac’s weekly survey of rates. The average rate for a 30-year fixed rate mortgage fell six basis points to 3.42 percent; the average rate for a 15-year fixed rate mortgage was four basis points lower at 2.72 percent. 5/1 adjustable rate mortgages had an average rate of 1.81 percent, which was one basis point lower than the previous week’s reading Discount points were also lower and averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 254,000 claims, but new claims were lower than the expected reading of 259,000 new claims which was based on the prior week’s reading of 251,000 new jobless claims. New jobless claims have stayed below 270,000 new claims for three months for the first time since 1973.

In prepared testimony before the Financial Services Committee, Federal Reserve Chair Janet Yellen discussed problems facing two major banks and said the Fed’s goal was managing its regulatory stance to support financial stability.

September’s Consumer Confidence Index reading rose to 104.1, which exceeded analysts’ estimated reading of 99.3 and August’s reading of 101.1.

What’s Next

Next week’s scheduled economic reports include readings on construction spending and several labor-related releases including ADP Payrolls, Non-Farm Payrolls and the National Unemployment Rates. Weekly reports on mortgage rates and new jobless claims are set for release as usual.

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2101 W Shelly Avenue Apache Junction, AZ 85120

$459,990

4 Beds

2.5 Baths

2,051 SqFt

Status Active

MLS # 6688460

Property Type Single Family Residence

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Welcome to Radiance at Superstition Vistas, a brand new master planned community located on the border where Mesa meets Apache Junction. This is a rare opportunity for optimal living - to have the convenience of City living while enjoying the breathtaking Superstition mountains! Small town feel meets modern amenities at its best! The Hanna 2052 sq ft, 4 bed/2.5 bath adorable, energy efficient home in which you will find tile in all common areas, 9 foot ceilings and on trend extra bright white walls.. Located close to the 24, 60 & 202.

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3339 S 177th Drive Goodyear, AZ 85338

$459,990

3 Beds

2 Baths

1,971 SqFt

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MLS # 6694772

Property Type Single Family Residence

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Welcome Home! This cozy single story home features 3 bedrooms plus study, 2 bath, 2 car garage and a Double Gate to backyard! Open kitchen, dining and great room area. Extended Covered Patio expands to a glorious outdoor space to create the oasis you've always wanted! Interior has 9ft ceilings, 8 ft interior doors, shaker style white cabinets, stainless steel appliances, granite countertops, wood look tile floor throughout and carpeted bedrooms. Conveniently located near shopping and dining options. You won't want to miss out on this one!

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7417 W Northview Avenue Glendale, AZ 85303

$459,990

3 Beds

2.5 Baths

1,986 SqFt

Status Active

MLS # 6666090

Property Type Single Family Residence

Price Type --

This home is our Concerto plan with 3 bedrooms, 2.5 bath home. The kitchen is beautifully designed with 42-inch grey cabinetry, Quartz counters and stainless-steel appliances. The adjacent great room includes a multi-slide door extending perfect for indoor/outdoor living. Upstairs a generously sized loft is perfect for additional living. The Primary Suite features a large bath with shower a huge walk-in closet. Don't miss this home! ^^^Up to 6% of Base Price can be applied towards closing cost and/or short-long term interest rate buydowns when choosing our preferred Lender. Additional eligibility and limited time restrictions apply.

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21571 W Papago Street Buckeye, AZ 85326

$459,990

4 Beds

3 Baths

2,012 SqFt

Status Active

MLS # 6671550

Property Type Single Family Residence

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Spacious Larkspur plan that has 4 bedrooms, 3 baths. It has a 12x8 sliding glass door off the great room. Stainless steel electric appliance package with microhood. Tahoe Maple Boulder cabinets throughout the home with 42'' kitchen uppers and a pull out trash drawer with two bins. AZT Granite Bianco Typhoon in kitchen with a stainless steel single bowl kitchen sink. Upgrade flooring includes EMS Solara Yaris 20x20 in all areas of the home except bedrooms and closets. Dual sinks at bath 2, soft water loop, garage door opener two remotes, 8' tall garage doors for those high profile vehicles, garage service door for easy access into the backyard and more. Estimated completion in May.

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