Summary: Mortgage rates ticked up this week, maintaining ongoing low levels and making home loans more affordable. This, coupled with a strong labor market, makes this a good time for buyers to get in the real estate market. This environment is good for strong housing market activity. This article will go over where things stand today regarding mortgage rates and where they are forecasted to go in the coming weeks.
Last week’s economic reports included the National Association of Home Builders Housing Market Index along with readings on consumer sentiment and weekly reports on mortgage rates and new jobless claims.
NAHB: Builder Confidence d in Housing Markets Drops 1 Point in January
Homebuilder confidence in overall housing market conditions dropped one point in January, but analysts said that a new trade deal would likely benefit builder interests. The National Association of Home Builders Housing Market Index dropped to an index reading of 75 from December’s reading of 76; December’s reading was the highest since 1999.
The reading for builder confidence in January 2019 was 58; while any reading over 50 is considered positive, builder confidence increased significantly year-over-year.
Sub-index readings used to calculate the overall housing market index reading were mixed; builder confidence in current housing market conditions fell 3 points to an index reading of 81.
Homebuilder confidence in market conditions over the next six months was unchanged at a reading of 79. Homebuilder confidence in buyer traffic levels in new housing developments rose one point to 58; index readings over 50 for buyer traffic are unusual.
NAHB reported mixed readings for homebuilder sentiment regionally. Builder confidence in market conditions in the Western region rose four points; builder confidence in the Northeastern region rose three points and builder confidence readings for the South were unchanged. Builder confidence in housing market conditions in the Midwest fell seven points.
Factors contributing to high builder confidence in housing markets include high demand for homes and a potential easing of materials prices due to recent trade agreements. Builders continue to battle high materials and labor costs that reduce their profit margins. Analysts note that narrower profit margins contribute to builders’ongoing focus on building high-end homes.
Mortgage Rates Rise; New Jobless Claims Fall
Average mortgage rates rose incrementally last week; Freddie Mac reported a one basis point gain for 30-year-fixed-rate mortgages to 3.65 percent. Rates for 15-year fixed-rate mortgages averaged 3.09 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.39 percent and were nine basis points higher.
New jobless claims were lower than expected with 204,000 initial claims filed. Analysts expected 220,000 new claims and 214,000 new claims were filed the prior week. Initial jobless claims fell for the fifth consecutive week, which indicates a strong labor market.
The University of Michigan reported a lower index reading for its Consumer Sentiment Index in January. The monthly reading fell to 99.1 from December’s reading of 99.3; the projected reading for January was 99.6. The Consumer Sentiment Index reflects consumers’ attitudes toward their personal finances along with their views of overall business and buying conditions.
Current Numbers for WA, OR, ID, and CO
Washington State mortgage rates hit 3.69% and 3.56% for conforming 30-year mortgages and 5/1 ARMs, and for jumbo loans, the numbers in the state are 3.74% and 2.97% for 30-year mortgages and 5/1 ARMs, respectively. In Oregon, conforming loan rates are 3.84% for 30-year mortgages and 3.61% for 5/1 ARMs. For jumbo loans, the numbers are 4.04% for 30-year mortgages and 3.82% for 5/1 ARMs.
Mortgage rates in Idaho for conforming loans for 30-year fixed-rate mortgages is 3.76%, and 3.61% for 5/1 ARMs, while for jumbo loans, the numbers for each loan type are 3.95% and 3.94%, respectively. In Colorado, the rate for conforming loans for 30-year fixed-rate mortgages is 3.70%, and 3.50% for 5/1 ARMs. For jumbo loans, the numbers for each loan type are 3.75% and 3.46%.
This week’s scheduled economic reports include sales of previously-owned homes and the Chicago Fed’s National Index report; weekly readings on mortgage rates and new jobless claims will also be released.
Ready to Apply For a Home Loan?
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