The Federal Reserve announced last Wednesday that it was leaving the benchmark interest rate near zero. However, mortgage rates trended upward – likely due to what the Fed claims is temporary inflation. Retail sales fell in February. In other housing news, home builder confidence dropped to its lowest level in seven months. Mortgage application submissions decreased on the refinance index but picked up on the purchase index. Housing starts and building permits slowed – largely a result of increased construction costs. Initial jobless climbed but continuing jobless claims fell.
Mortgage Rates Currently Trending
This Week's Potential Volatility
- Retail sales dropped a total 3% in February – falling in every major retail category except groceries and gas. Groceries inched up 0.1% while gas sales increased by 3.6%.
- Down from a level of 84 in February, the NAHB housing market index dipped to 82 in March.
- For the week ending 3/12, mortgage application submissions saw a composite decrease of 2.2%. Though the purchase index increased by 2%, the refinance index fell by 4%. However, purchase application submissions are still up 5% year-over-year.
- Housing starts and building permits slowed slightly in February due to scattered winter storms nationwide. Falling to a seasonally adjusted annual rate of 1.43 million, housing starts dropped 10.3% month-over-month while building permits fell 10.8% month-over-month to a seasonally adjusted annual rate of 1.68 million. Though single-family housing starts had been driving the construction boom, they slowed 8.5% last month. Multifamily housing starts fell by 14.5% nationwide
- After meeting on Tuesday and Wednesday of last week, the Federal Open Market Committee (FOMC) voted to leave interest rates unchanged at 0% to 0.25%.
- Initial jobless claims jumped by 45,000 to reach 770,000 for the week ending 3/13, while continuing jobless claims dropped to 4.12 million the week ending 3/6 – their lowest level since last spring.
This week’s important economic reports include:
- Existing home sales
- New home sales
- Mortgage applications
- Jobless claims
- Personal income
- Core inflation
- Consumer spending
Economic Calendar Outlook
Week of March 22, 2021