Weekly Mortgage Report – Last Week of 2022
The 30-year fixed rate moved higher for the week ended December 28, 2022. According to the Freddie Mac Primary Mortgage Market Survey, the 30-year increased 15 basis points from 12/22/22 – 12/28/22. The housing market remains in the doldrums with declining sales, inventory and prices. The declines in sales and deceleration in home prices began swiftly earlier in 2022 but have moderated more recently. While the intensity of weakness is moderating, the market continues to decline and forward leading indicators suggest housing will remain weak throughout the winter. (December 29, 2022 https://www.freddiemac.com/pmms)
Per the Commerce Department, U.S. economic activity unexpectedly jumped more than previously estimated in the third quarter, according to revised data. Real GDP was revised to 3.2% from the previously report 2.9%. Consumer spending and non-residential fixed investment were partly offset by a downward revision to private inventory investment. “The unexpected upward revision to Q3 GDP is encouraging but the economy will be tested soon from past tightening in financial market conditions and rate hikes by the Fed,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics. (December 22, 2022 https://www.bea.gov/news/glance)
U.S. home prices continued to decline in October, resulting in four straight months of weakening, according to the S&P CoreLogic Case-Shiller Home Price Index released on Tuesday. The index fell 0.5% month-over-month, data as of October 31, 2022. “As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices. Given the continuing prospects for a challenging macroeconomic environment, prices may well continue to weaken,” said Craig Lazzara, managing director at S&P Dow Jones Indices. (December 27, 2022 https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview)
Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 225,000 for the week ended Dec. 24, the Labor Department said this weekend. This was right in line with forecasts. The claims figures have held well below the 270,000 threshold that economists see as a red flag for the labor market. The economists go on to say the layoffs in the technology and interest-rate sensitive industries like housing have yet to leave an imprint on claims as those workers appear to rejoin the work force with relative ease. (December 29, 2022