Last week’s economic reports included readings from the National Association of Home Builders and Commerce Department releases on Housing Starts and Building Permits issued. Weekly readings on mortgage rates and first-time jobless claims were released, along with a monthly report on consumer sentiment.
NAHB: Home Builder Housing Market Index Drops 1 Point
August’s reading for the National Association of Home Builders Housing Market Index dropped one point to 67. This was the lowest reading for home builder confidence in housing market conditions in 11 months. Analysts said that trade wars are causing concern among builders due to higher costs for building materials. Higher costs will be passed on to home buyers, many of whom are already challenged by rising home prices and strict mortgage approval requirements.
Housing starts reached 1.168 million on an annual basis in July; analysts expected 1.270 million starts based on June’s reading of 1.158 million starts. Building permits issued increased in Jul with 1.311 million permits issued on an annual basis. June’s reading was 1.292 permits issued. Lower numbers of available new homes were a potential problem for housing sector, but demand remains high.
Mortgage Rates and New Jobless Claims Lower
Freddie Mac reported lower average mortgage rates last week; the rate for 30-year fixed rate mortgages fell six basis points to 4.53 percent. The average rate for a 15-year fixed rate mortgages fell four basis points to 4.01 percent and rates for a 5/1 adjustable rate mortgage averaged three basis points lower at 3.87 percent.
First-time jobless claims fell to 212,000 new claims as compared to expectations of 215,000 new claims and the prior week’s reading of 214,000 new clams filed. The latest reading approached the level of new jobless claims seen as a post-recession low First-time unemployment claims indicate levels of lay-offs and are viewed by analysts as an indicator of job market performance.
The University of Michigan reported that consumer sentiment reached its lowest reading since 2006. Analysts said that consumer concerns were concentrated among the bottom third of income ranges surveyed. Rising consumer costs caused August’s consumer confidence index to slip to 95.3 as compared to an expected index reading of 98.5. July’s consumer sentiment reading was 97.9.
This week’s scheduled economic reports include readings on new and pre-owned home sales and minutes from the most recent meeting of the Fed’s Federal Open Market Committee. Weekly readings on mortgage rates and new jobless claims will also be released.