Last week’s economic reports included readings from the National Association of Home Builders on housing markets along with Commerce Department data on housing starts and building permits issued. Weekly reports on mortgage rates and unemployment claims were also released.
NAHB: Builder Confidence in Housing Markets Increases in July
Homebuilders gained confidence in housing market conditions as home buyers sought homes in less-congested suburban areas. Builder confidence rose 14 points to an index reading of 72 in July. NAHB Chair Chuck Fowke said, “Builders are seeing strong traffic and lots of interest in new construction as existing home inventory remains lean.”
Homebuyers sought larger homes to accommodate work-at-home needs and also fled from urban congestion posing hazards due to Covid-19. Robert Dietz, chief economist for NAHB said, “Flight to the suburbs is real.” This trend benefits home builders, who must meet buyer demand.
Inventories of pre-owned homes remained low and improved builder outlook on current sales of single-family homes by 16 points to an index reading of 79.
Builder confidence in market conditions for the next six months rose seven points to 75 and builder confidence in buyer traffic rose 15 points to 58. Index readings over 50 indicate positive market conditions.
Commerce Department readings for June housing starts and building permits issued were higher than in May. 1.19 million housing starts were reported on a seasonally adjusted annual basis as compared to May’s reading of 1.01 million housing starts. 1.24 million building permits were issued in June on a seasonally adjusted annual basis as compared to May’s reading of 1.22 million permits issued.
Mortgage Rates, Jobless Claims
Freddie Mac reported the lowest mortgage rates in 50 years last week; the average rate for 30-year fixed-rate mortgages fell five basis points to 2.98 percent. Rates for 15-year fixed-rate mortgages fell three basis points to 2.48 percent; rates for 5/1 adjustable rate mortgages rose four basis points to 3.06 percent on average Analysts said that as low mortgage rates encouraged would-be buyers to enter the market, increasing cases of COVID-19 in some areas could cause markets to cool as fears of layoffs and unemployment impact real estate markets.
New and continuing jobless claims fell last week but remained much higher than pre-COVID-19 readings. 1.30 million initial jobless claims were filed as compared to the prior week’s reading of 1.31 million new claims. Continuing jobless claims fell to 17.30 million claims as compared to the previous weekly reading of 18.10 million ongoing jobless claims.
Readings on sales of new and previously-owned homes will be released along with weekly reports on mortgage rates and unemployment claims.