Mortgage rates trended upward last week but remain in a historically low range. The Case-Shiller home price index reported the fastest pace of home price appreciation since 2014, while the FHFA home price index reported record-breaking home price gains as well. Consumer confidence rose to a three-month high. Mortgage applications fell week-over-week, but still increased annually. New home sales rose nationwide. Initial and continuing jobless claims dropped. GDP grew at a faster pace than expected. Pending home sales slipped slightly. Personal income surged and consumer spending rose, while core inflation inched up.
Mortgage Rates Currently Trending
This Week’s Potential Voliability
- In December, home prices appreciated 1.3% month-over-month and 10.1% annually, according to the Case-Schiller home price index. The year-over-year gain marks the largest annual rise in home prices since April 2014. According to the 20-city index, the largest annual home price gains took place in Phoenix, Seattle, and San Diego – rising 14.4%, 13.6% and 13%, respectively.
- According to the FHFA home price index, home prices appreciated at an annual pace of 11.4% and a quarterly year-over-year pace of 10.8% in December – the highest home price gains ever recorded by the Federal Housing Finance Agency (FHFA). Quarter-over-quarter, home prices rose 3.8% – marking the 38th consecutive quarter of home price gains (since September 2011). Month-over-month, home prices appreciated at a seasonally adjusted rate of 1.1%.
- Consumer confidence increased for the first time in four months, reaching a level of 91.3 in February. The increase – up from January’s total of 88.9 – marks the highest consumer confidence level in three months.
- The Mortgage Bankers Association (MBA) reported a composite drop of 11.4% in mortgage application submissions for the week ending 2/19. The refinance index fell 11% from the previous week while the purchase index fell 12%. Year-over-year, however, refinance application submissions are still up 50% and purchase application submissions are up 7%.
- In January, new home sales rose higher than expected – up 4.3% from December. Reaching a seasonally adjusted annual rate of 923,000 in January, new home sales surged well beyond MarketWatch’s predicted level of 850,000. Compared to January 2020, new home sales are up nearly 19% despite a slight drop in home inventory.
- For the week ending 2/20, initial jobless claims fell for the first time in five weeks – falling to 730,000, which was much lower than expected. Continuing claims fell as well – down to 4.42 million for the week ending 2/13.
- GDP grew a pace of 4.1% in the final quarter of 2020, which was slightly higher than expected. Though GDP decreased annual by 3.5%, economists believe that we will see a strong rebound this year – with projected growth at 5% to 9% for the first quarter of 2021.
- According to the National Association of REALTORS® (NAR), pending home sales fell 2.8% in January. Compared to last year, however, pending sales are up 13% – showing that the housing market is still going strong despite the typical seasonal slowdowns.
This week’s important economic reports include:
- Construction Spending
- Mortgage Applications
- ADP Employment
- Jobless Claims
- Nonfarm Payrolls
- Private Payrolls
- Manufacturing Payrolls
- Unemployment Rate
- Participation Rate
- Average Hourly Earnings
- Average Work Week
- Consumer Credit