What’s Ahead For Mortgage Rates This Week – December 19, 2016

Housing news was boosted by the National Association of Home Builders Housing Market Index, which posted its highest readings since July of 2002. In other news, the Federal Reserve’s Federal Open Market Committee voted to raise the federal funds rate and Fed Chair Janet Yellen gave a press conference. Mortgage rates rose and weekly jobless claims fell.

Home Builder Confidence Highest in 14 Years, Home Construction Lags

According to the National Association of Home Builders, builder confidence in housing market conditions reached its highest rate since 2002 in December. The NAHB Housing Market Index reading topped out at 70 as compared to November’s reading of 63. Analysts said that December’s high reading resulted from a post-election bump in builder confidence. While high builder confidence could bode well for supplies of new homes, construction rates continued to lag strong economic indicators such as low unemployment and high demand for homes. While builders gained confidence in current and projected housing market conditions, they continued to face shortages of labor and buildable lots.

Fed Raises Rate

The Federal Open Market Committee of the Federal Reserve announced it would raise the federal funds range by 0.25 percent to 0.50 to 0.75 percent. FOMC said strengthening job markets, lower unemployment and rising household spending supported the decision to raise the federal funds rate. Inflation, while below the Fed’s target of 2.00 percent, is gradually moving toward the Fed’s medium term goal. FOMC’s statement indicated that the Fed’s monetary policy would remain accommodative.

Fed Chair Janet Yellen held a press conference and cited “considerable progress” toward the Fed’s dual mandate of maximum employment and price stability as factors supporting the decision to raise the target federal funds range. Labor markets continue to improve; Chair Yellen said that the economy has added 180,000 jobs per month over the last three months. 15 million jobs have been added in the past seven years. Inflation is growing gradually, and the Fed expects to achieve its target inflation rate of 2.00 percent over the next two years.

Month-to-month consumer spending readings held steady at 0.20 percent growth. Core consumer price index data, which excludes volatile food and energy sectors, rose from 0.10 percent to 0.20 percent in November.

Mortgage Rates, Weekly Jobless Claims

Mortgage rates were higher last week, but Freddie Mac said that its survey data was collected before FOMC raised the federal funds rate. Analysts at Freddie Mac suggested a wait-and see position on rate forecasts due to the changing political climate. The average rate for a 30-year fixed rate mortgage was three basis points higher at 4.16 percent; the average rate for a 15-year fixed rate mortgage rose one basis point to 2.37 percent and the average rate for a 5/1 adjustable rate mortgage was two basis points higher at 3.19 percent. Average discount points for fixed rate mortgages held steady at 0.50 percent and dipped to 0.40 percent for a 5/1 adjustable rate mortgage.

New jobless claims were lower last week at 254,000 claims filed. Analysts had expected a reading of 250,000 new claims based on the prior week’s reading of 258,000 new claims filed. Volatility in weekly readings for new jobless claims can be expected due to seasonal hiring and layoffs.

What‘s Ahead

Next week’s economic releases include readings on new and previously-owned home sales, inflation and consumer sentiment. Readings for mortgage rates and new jobless claims will also be released.

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45240 W Windrose Drive Maricopa, AZ 85139

$465,000

5 Beds

3.5 Baths

3,432 SqFt

Status Active

MLS # 6674588

Property Type Single Family Residence

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The home features an open floor plan with a formal living and dining room, as well as a great room that overlooks the backyard. It includes a half bath downstairs for convenience and 5 bedrooms upstairs with 3 additional bathrooms. The kitchen has plenty of cabinet space with a desk area, walk-in pantry, granite countertops, and an under-mount sink. Large tile is in the traffic, kitchen, and wet areas, with neutral carpet in the rest of the home.

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25664 N 162nd Drive Surprise, AZ 85387

$465,000

3 Beds

2 Baths

2,041 SqFt

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MLS # 6672937

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This gorgeous, highly upgraded floor plan is model home perfect. This 2041 Sq Ft. single level property has an open floorplan, 3 bdrms, 2 baths plus a den/flexspace! It was built in 2020 with lots of upgrades! Step inside to a home that is light, bright and a beautiful blend of luxury and comfort. This home is better than new, it boasts beautiful white shaker cabinets with a beautifully deigned backsplash, luxury wood-look flooring, Brand new Carpet throughout the house as well as stunning granite countertops which make for a sleek and sophisticated look! The impressive gourmet kitchen offers a gas cooktop and and an island breakfast bar. 8ft doors throughout the house. The owner's suite is spacious with a walk in shower. This home also comes with a backyard designed for easy maintenance.

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15622 W Yucatan Drive Surprise, AZ 85379

$465,000

4 Beds

2 Baths

2,407 SqFt

Status Active

MLS # 6672604

Property Type Single Family Residence

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Meticulously maintained and cared-for home on a quaint, tree-lined street in Greer Ranch. Located in the beautiful city of Surprise. This 4 bed 2 bath home has a large living room with a separate formal dining room. Upgraded with durable, wood laminate flooring throughout. Fully landscaped front and back with auto watering system. Spacious kitchen with SS appliances. Built-in bookshelves. Custom front security screen door. Huge primary suite. Ensuite with privacy door. Covered back patio with an extended concrete slab. Split 3-car garage. 3rd bay has lots of built-in storage cabinetry. Great for a workshop or man cave. Must see this beautiful home!

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7508 W Beryl Avenue Peoria, AZ 85345

$465,000

3 Beds

2 Baths

1,816 SqFt

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MLS # 6677431

Property Type Single Family Residence

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Light and bright this Peoria home with a pool boast all tile and vinyl floors, granite countertops and plantation shutters throughout. Primary bath has garden tub, 2 closets and executive height countertops with custom glass tiles surrounding mirrors. Newer roof, AC and water heater. Newly painted, updated ceiling fans, light switches and outlets throughtout. Plus the vaulted ceiling, split floorplan and living/family room combo make this house a spacious place to call home. Large lot, RV gate and solar panels with NO HOA!

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