Last week’s economic reports included readings from the National Association of Home Builders on housing market conditions, Commerce Department reports on Housing starts and building permits issued and the National Association of Realtors® report on sales of previously owned homes.
The Fed reduced its key interest rate and weekly reports on mortgage rates and first-time jobless claims were also released.
Builder Confidence in Housing Market Improves, Sales of Pre-Owned Homes Rise
The National Association of Home Builders Housing Market Index rose one point to an index reading of 68 in September. August’s reading was adjusted to 67 from an initial reading of 66. September’s reading matched the highest reading posted year-over-year.
Readings over 50 indicate that most builders are confident about housing markets. Analysts noted that builder confidence rose despite ongoing concerns about higher materials costs caused by trade wars and tariffs.
According to the Commerce Department, housing starts rose in August with 1.364 million starts on a seasonally-adjusted annual basis. Analysts expected 1.300 million starts and 1.215 million starts were posted for July. More housing starts are good news for housing markets stifled by short supplies of available homes and high demand for homes.
Building permits issued in August also rose from July’s reading. 1.419 million permits were issued as compared to July’s reading of 1.217 million permits issued on a seasonally-adjusted annual basis.
August sales of previously-owned homes rose to 5.49 million sales as compared to July’s annual sales pace of 5.42 million sales. Analysts predicted August sales of pre-owned homes to decrease to 5.39 million sales.
Mortgage Rates, Weekly Jobless Claims Rise
Freddie Mac reported higher mortgage rates last week with rates for 30-year fixed rate mortgages 17 basis points higher at an average of 3.73 percent. Rates averaged 3.21 percent for 15-year fixed rate mortgages and were 12 basis points higher.
The average rate for 5/1 adjustable rate mortgages was 13 basis points higher at 3.49 percent. First-time jobless claims rose last week to 208,000 claims. Analysts expected 215,000 new claims based on the prior week’s reading of 206,000 new jobless claims filed.
The Fed cut its benchmark short-term interest rate by one-quarter point to 1.75 to 2.00 percent, but there was some dissent among policymakers. Seven members of the Federal Open Market Committee voted for the rate decrease; two members voted against the rate cut and one member thought that rates should be cut 0.50 percent.
This week’s scheduled economic reports include readings on Case-Shiller Home Price Indices, inflation, pending home sales and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims will also be released.