John’s Finance Corner: Home Builders, Housing Starts, and the Impact on Mortgage Rates
In the ever-evolving landscape of real estate and finance, staying abreast of market indicators is crucial. The latest reports from the National Association of Home Builders (NAHB) reveal a continued dip in builder confidence, with the Housing Market Index experiencing its third consecutive monthly decline in July, reaching its lowest point since last December. Despite this downturn, there’s a silver lining: builders anticipate mortgage rates to decrease later in the year, as inflation shows signs of easing.
June brought a slight glimmer of hope to new home construction, after a disappointing May, with Housing Starts and Building Permits surpassing expectations. This uptick, however, was predominantly in the multi-family sector, while single-family home starts and permits saw a decline.
The labor market witnessed a spike in initial jobless claims, hitting a 5-week peak with 243,000 new filings. This increase, tying with early June’s high, coupled with a rise in Continuing Claims to 1.867 million, has inadvertently supported the bond market, subsequently influencing mortgage rates positively.
A Pivotal Week Ahead: The upcoming week is poised to be a critical one for bonds and mortgage rates. The impending data releases could catalyze the Federal Reserve towards their first rate cut in September. Key housing reports are on the horizon, with June’s Existing and New Home Sales data due on Tuesday and Wednesday. Additionally, the first estimate of the second quarter GDP and the latest Jobless Claims will be unveiled on Thursday. The week will culminate on Friday with the release of the Personal Consumption Expenditures, the Fed’s preferred inflation gauge.
As we navigate through these market fluctuations, it’s essential to remain informed and prepared for the potential shifts that lie ahead. The forthcoming reports will undoubtedly shape the trajectory of mortgage rates and the broader economic outlook.
Stay tuned for more updates!
John Lamberg
Senior Loan Officer
Mobile 727.366.9947
Website ccm.com/john-lamberg
Email [email protected]
