What’s Ahead For Mortgage Rates This Week – October 31, 2016

Last week’s economic reports included S&P Case-Shiller Home Price Indexes, along with readings on new and pending home sales. Recurring weekly reports on mortgage rates and new jobless claims were also released.

Case-Shiller: Pacific Northwest Shows Fastest Home Price Growth

According to the Case-Shiller 20-City Home Price Index for August, home prices in Portland, Oregon and Seattle, Washington grew fastest year-over-year. Portland posted an August index reading of 11.70 percent and Portland followed closely with a reading of 11.40 percent. Denver, Colorado rounded out the top three cities with the fastest rates of home price growth with a year-over-year reading of 8.80 percent. The 20-City Home Price Index rose 0.30 percent year-over-year to 5.30 percent in August.

Low inventory of available homes poses challenges for housing markets, but Case-Shiller reported that the national home price index was 0.60 percent lower than its peak reading in 2006. The 20-City Home Price Index was 7.10 percent lower than the 2006 peak. This provides a positive context for healthy home price growth, but concerns linger about a repeat of the housing bubble that burst and caused home prices to crash.

David M. Blitzer, Chairman of the S&P Index Committee said that a new housing bubble is unlikely. Home buyers are not taking out huge mortgages as was common prior to the Great Recession; mortgage lenders have adopted stricter qualification standards to help ensure that borrowers can afford their mortgages.

New Home Sales Rise in September

Sales of new homes rose to a seasonally-adjusted annual rate of 593,000 sales in September according to the Commerce Department. Although lower than analysts’ expected reading of 600,000 sales, September’s reading surpassed August’s reading of 575,000 sales. August’s reading was downwardly revised from its original reading of 609,000, which suggests that new home prices are growing at a slower rate than expected.

High demand for homes boosted September’s reading for pending home sales, which represents homes under contract for sale that have not closed. Pending home sales increased in September with a reading of 1.50 percent growth as compared to August’s negative rate of -2.50 percent. Pending home sales provide indications of future completed sales and mortgage loan volume.

Mortgage Rates Rise, New Jobless Claims Fall

Mortgage rates were lower last week according to Freddie Mac’s Primary Mortgage Market Survey. The average rate for a 30-year fixed rate mortgage fell five basis points to 3.47 percent; rates for a 15-year fixed rate mortgage averaged 2.78 percent, which was one basis point lower than the prior week’s reading. The average rate for a 5/1 adjustable rate mortgage was also one basis point lower at 2.84 percent. Average discount points were 0.60, 0.50 and 0.40 percent respectively.

In spite of growth in home prices and volume of sales, consumer confidence slowed in October. October’s index reading of 98.60 as compared to an expected reading of 101.00 and September’s reading of 103.50. Analysts said that uncertainty over the upcoming presidential election contributed to October’s lower reading.

What’s Ahead

Next week’s scheduled economic reports include readings on inflation, construction spending core inflation, and labor reports. Non-farm payrolls, ADP employment, national unemployment rates will also be released. Freddie Mac’s mortgage rates report and new jobless claims will also be released.

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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

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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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