Mortgage News for the Week of January 27th, 2014
Last week was an action-packed week for economic news, and all of it was packed into Thursday: Weekly Jobless claims came in at 326,000 which was lower than the expected 330,000 new claims. This week's claims were higher than the prior week's 325,000 new jobless claims filed. The NAR released its Existing Home Sales Report for December; sales of existing homes sold at a seasonally adjusted annual rate of 4.86 million. December's reading fell shy of estimates of 490 million existing home sales, but the estimate was based on November sales that were later adjusted downward to 4.82 million sales of existing homes. Existing home sales for 2013 came in at 5.09 million sales, a 9.10 percent increase over 2012 sales. The median price of a pre-existing home reached $198,000 in December, with the median price for all of 2013 at $197,100, which was an increase of 11.50 percent over the average price for an existing home in 2012. Pent-up demand and a lingering shortage of available homes likely contributed to last year's rapid rise in home prices. Mortgage Rates Mixed, FHFA Reports Slower Gain For Home Prices Freddie Mac reported mixed results for average mortgage rates in its weekly PMMS report. The rate for a 30-year fixed rate mortgage fell from last week's 4.41 to 4.39 percent. The average rate for a 15-year mortgage dipped by one basis point to 3.44 percent; discount points for both 30 and 15-year mortgages were unchanged at 0.70 percent. The average rate for a 5/1 adjustable rate mortgage rose from 3.10 to 3.15 percent with discount points unchanged at 0.50 percent. FHFA, the agency that oversees Fannie Mae and Freddie Mac, released its Home Price report for November 2012. This report is based on information gathered about homes with mortgages owned or backed by the two firms. According to FHFA, home prices increased by 7.60 percent year-over-year. Home prices moved up by 0.10 percent in November as compared to a rate of 0.50 percent in October. Leading Economic Indicators Suggest Economy Strengthening The Leading Economic Indicators report for December moved up by 0.10 percent, which pushed the index to a reading of 99.4. December's reading represented the sixth consecutive month that the index gained ground. Economists associated with the LEI report note that while steady growth is expected during the spring, the economy will likely encounter a few obstacles including rising interest rates and possible political gridlock over raising the national debt ceiling. This Week This week's economic news is set to include New Home Sales, the Consumer Confidence Index, and Weekly Jobless Claims. Freddie Mac's PMMS mortgage rates and reports on consumer spending and consumer sentiment round out the week's news. The FOMC statement expected after the committee concludes its meeting on Wednesday is expected to provide news of the Fed's plan for further tapering of its quantitative easing program.
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