John's Finance Corner: Mixed Bag of Data for Mortgage Rates as We Head into Thanksgiving Week
As we approach Thanksgiving week, the economic landscape presents a mixed bag of data that could impact mortgage rates. October brought a rebound in closings on existing homes, showing a 3.4% increase from the previous month and a 2.9% increase compared to the same time last year. This marks the first annual increase in over three years, driven likely by the lower interest rates seen in August and September, which motivated buyers whose closings occurred in October.
The National Association of Home Builders (NAHB) released their November Home Builder Sentiment data, indicating that sentiment has risen for the third consecutive month. Builders are increasingly viewing conditions as favorable, with improvements noted in buyer traffic and current and future sales expectations. NAHB chairman Carl Harris highlighted that builders are anticipating an improved regulatory environment in 2025.
Despite this positive sentiment, new construction faced a contraction in October, with new housing starts decreasing by 3.1% from September and single-family new housing starts down nearly 7%. The shortage of new homes, now at six-year lows, suggests that home prices are likely to continue rising due to limited supply.
Initial jobless claims reached their lowest levels since April, but continuing claims rose by 36,000, surpassing 1.9 million for the first time in three years. This trend indicates that while new filings are down, it is taking longer for unemployed individuals to find new jobs, suggesting labor market weakness and a slower pace of hiring.
As Thanksgiving week begins, mortgage rates have started off strong, buoyed by positive reactions to President-Elect Trump's pick for Treasury Secretary, Scott Bessent. The short week ahead is packed with market-moving data, including home appreciation data, new home sales, pending sales, the Federal Reserve's latest meeting minutes, initial and continuing jobless claims, third-quarter GDP, and the Fed's favorite measure of inflation, PCE. All of this critical information is set to be released before the markets close for Thanksgiving, setting the stage for potential volatility in the bond market.
Stay tuned as we analyze these developments and their implications for mortgage rates and the broader economic outlook.
