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

Last week’s economic reports included new home sales, pending home sales along with weekly mortgage rates and new jobless claims.

New Home Sales Surpass Expectations

Sales of new homes surpassed expectations and the prior month’s reading. April’s reading of 619,000 sales exceeded expectations of 523,000 new homes sold and 531,000 new homes sold in March.  New home sales rose by 16.60 percent on a seasonally adjusted annual basis, which was the highest increase in 24 years. 

Analysts said that April’s new home sales indicate that builders are increasing production of new homes to meet high demand for homes. Short inventories of available homes are credited with driving up demand and home prices. Buyers seeking family homes are contending with investor buyers and cash buyers in popular markets.

With affordability becoming limited in many cities, first time and moderate income homebuyers aren’t buying as many homes as they once did. This development contributes to slowing markets, as move-up buyers generally rely on first time buyers to purchase their homes. 

Shortages of available homes has pressured home builders to break ground on new home construction projects, but builders continue to cite labor shortages and a lack of buildable lots as reasons why they aren’t building homes as fast as homes are needed. 

Pending Home Sales Numbers Suggest Peak Buying Season Returns

Pending home sales were also higher than forecast in April with a reading of 5.10 percent as compared to expectations of 0.80 percent for April and the March reading of 1.60 percent. Pending home sales gauge future closings for home sales and reached their highest level in 10 years and posted a year-over-year gain of 4.60 percent. 

Three of four regional readings for pending home sales posted gains, with home sales in the Midwest posting slower growth. On a year-over-year basis, he South posted a gain of 6.80 percent and the Northeast posted a gain of 1.20 percent. The West saw a jump in pending sales with a reading of 11.40 percent after posting a negative reading in March. 

April’s expansion in new and pending sales suggests that the peak home buying season is back.

Mortgage Rates Rise; New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates. The rate for a 30-year fixed rate mortgage was six basis points higher at 3.64 percent; the rate for a 15-year mortgage rose eight basis points to 2.89 percent. The average rate for a 5/1 adjustable rate mortgage rose seven points to 2.87 percent. Discount points averaged 0.50 percent for all mortgage types. 

New jobless claims dipped last week to 268,000 as compared to an expected reading of 275,000 new claims and the prior week’s reading of 278,000 new claims. Analysts said that New York school employees that were eligible for benefits boosted jobless claims earlier in May due to a non-typical law that allows some school workers to draw unemployment during school closures such as spring break or labor disputes.

What‘s Ahead This Week

This week’s scheduled economic news includes Case-Shiller Home Price Indices, construction spending and reports on inflation, core inflation and consumer sentiment. No reports were scheduled for Monday due to the Memorial Day holiday. 

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20066 N Golden Barrel Drive Surprise, AZ 85374

$464,000

2 Beds

2 Baths

1,936 SqFt

Status Active

MLS # 6612237

Property Type Single Family Residence

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''Welcome to this meticulously maintained single-owner residence, boasting an expansive layout that exudes an airy ambiance. Featuring two generously sized bedrooms, this home offers an entertainer's delight with its seamless open concept design. The kitchen is adorned with stainless steel appliances, ample countertop space, and abundant cabinet storage, complemented by a formal dining area. Additionally, the generously proportioned office/den presents versatility, potentially serving as a third bedroom. Step outside to the inviting back patio, perfect for unwinding and savoring the serene beauty of Arizona winters. Completing this exceptional property is a spacious two-car garage, providing ample storage and convenience.''

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811 E Gold Dust Way San Tan Valley, AZ 85143

$464,000

4 Beds

3 Baths

2,287 SqFt

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MLS # 6668067

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Prepare to be amazed! This fabulous 4 bed, 3 bath Centex built residence is the one you've been looking for! Stunning curb appeal, easy-care front yard, and a 2.5 car garage w/paver driveway and entry are just the beginning! The interior boasts a cozy living area w/soft carpet in all the right places, high ceilings, modern light fixtures, and designer palette throughout. Hone your cooking skills in this gorgeous kitchen, comprised of ample cabinetry w/granite counters, a pantry, stainless steel appliances, and an quarts island complete w/a breakfast bar. Upstairs you'll find a perfectly-sized loft, where you can enjoy a relaxing Sunday evening! The primary bedroom features a walk-in closet and lavish ensuite w/dual sinks for added comfort. The expansive backyard includes a covered patio and large grassy area; the perfect place for spending quality time w/friends and loved ones! The community comes with 3 pools, tennis courts, and soon it will have pickleball courts and a splash pad!

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4431 W White Horse Boulevard Eloy, AZ 85131

$464,000

2 Beds

2.5 Baths

1,908 SqFt

Status Active

MLS # 6662575

Property Type Single Family Residence

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PARTICALLY FURNISHED 2 bedroom, 2.5 bath, den & golf cart garage w/4 ft extension. 908 Sq Ft. & Built in 2018! Kitchen features quartz counters, highly upgraded cabinets w/hardware, SS appliances, Gas range & under cabinet lighting. You will love the Deco security door, large neutral tile flooring (carpet only in bedrooms), plantation shutters, den has a door for privacy, cabinets w/hanging rod in the laundry room. Guest bedroom has its own en-suite bathroom. Both Master & Guest rooms have bay windows, Quartz vanities & tile showers. Step out back to the extended South facing covered patio & enjoy the Arizona weather. Patio furniture, outdoor bench & TV in Den are gifts from the seller. PAID HOME WARRANTY to 12/29/24, will transfer to the buyer. Don't miss out on this one! Welcome home

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18782 E Elizar Drive Gold Canyon, AZ 85118

$463,995

3 Beds

2.5 Baths

2,070 SqFt

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MLS # 6695224

Property Type Single Family Residence

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Entrada del Oro in the Superstition Mountains: A serene desert escape with breathtaking, rugged beauty. Perfect for sunrise and sunset admirers.

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