Last week’s economic news included readings From National Association of Home Builders, Commerce Department reports on housing starts and building permits issued Weekly readings on mortgage rates and new jobless claims were also released.
NAHB Posts 3rd Consecutive Decline in Builder Confidence
According to the National Association of Home Builders, builder confidence in housing market conditions dropped by one point in March to an index reading of 70. Three sub-categories of builder sentiment used to calculate the overall reading were either unchanged or lower than February readings.
Confidence in current market conditions were unchanged at 72, Builder confidence in market conditions for the next six months fell two points to an index reading of 78. The index for buyer traffic in new housing developments dipped three points to 51. Any reading over 50 indicates positive builder sentiment.
Builders cited increased demand for homes as a positive influence on builder confidence, but recent decisions to impose tariffs on some building materials concerned builders, but pronounced shortages of new and pre-owned homes contributed to positive builder sentiment.
Mortgage applications for new homes were 4.60 percent higher year-over-year in February according to the Mortgage Bankers Association.
Housing Starts Lower in February
The Commerce Department reported an annual rate of 1.236 million housing starts in February; this was seven percent lower than January’s reading of 1.329 million starts. Analysts expected a reading of 1.25 million starts. Housing starts were higher in the Northeast regions, but the Midwest, South and Western regions reported fewer starts in February than for January.
Permits for building new homes slipped by 5.70 percent in February, but ups and downs in construction activity during winter months can cause volatility in readings for permits and housing construction.
Mortgage Rates Mixed, New Jobless Claims Dip
Freddie Mac reported lower fixed mortgage rates for the first time in 2018; the average rate for a 30-year fixed rate mortgage was two basis points lower at 4.44 percent, Rates for 15-year fixed rate mortgages averaged 3.90 percent, which was four basis points lower than for the prior week. Mortgage rates for a 5/1 adjustable rate mortgage averaged 3.67 percent, an increase of four basis points on average.
First time jobless claims dipped last week to 226,000 new claims. Analysts expected new claims to drop to 228,000 new claims based on the prior week’s reading of 230,000 new jobless claims. The week ended on a positive note with consumer sentiment rising from an index reading of 99.7 to 102 in March. The Consumer Sentiment Index is produced by the University of Michigan.
This week’s scheduled economic reports include readings on sales of new and previously-owned homes; the Federal Open Market Committee of the Federal Reserve will issue its customary post-meeting statement, and Fed Chair Jerome Powell will give a press conference after the FOMC statement. Weekly readings on mortgage rates and new jobless claims will also be released.