Last week’s economic reports included readings from the National Association of Home Builders on housing markets; the National Association of Realtors® released data on sales of previously-owned homes and the Commerce Department released readings on housing starts and building permits issued. Weekly reports on mortgage rates and new jobless claims were also released.
NAHB: Builder Confidence Rises in December
According to the National Association of Home Builders, builder confidence in housing market conditions rose in December to an index reading of 76 as compared to November’s reading of 71. Any reading over 50 indicates that most home builders surveyed were confident about housing market conditions.
Builder confidence in current market conditions rose seven points to an index reading of 84; builder confidence in housing market conditions in the next six months rose one point to 79 and the index reading for buyer traffic in new single-family housing developments rose four points to 58. Analysts noted that the index reading for buyer traffic rarely reaches a reading of 50.
Regional readings were mixed with builder confidence in the Northeast falling two points; the Midwestern region showed builder confidence five points higher than in November and builder confidence readings in the South and West rose one point and three points respectively.
Analysts said that low mortgage rates, a slim supply of pre-owned homes for sale and low unemployment contributed to rising builder confidence. Negative factors impacting builder confidence included high land and labor costs, and a disparity between builders focusing on high-end construction while entry-level homes were most in demand.
The National Association of Realtors ®reported fewer sales of pre-owned homes in November; 5.35 million previously-owned homes sold on a seasonally-adjusted annual basis as compared to October’s reading of 5.44 million sales of previously-owned homes.
Fewer sales were caused by slim inventories of affordable homes for sale. This data supported home builders’ assertion that fewer available pre-owned homes boosted builder confidence in current housing markets.
Housing Starts, Building Permits Issued Rise in November
The Commerce Department reported 1365 million single-family housing starts in November as compared to 1.323 million starts in October. Building permits issued also rose in November with 1.482 million permits issued as compared to October’s reading of 1.461 million building permits issued. Housing Starts and building permits supply estimates for future inventories of available homes.
Mortgage Rates Unchanged, New Jobless ClaimsFall
Fixed mortgage rates were unchanged last week according to Freddie Mac. Rates for 30-year fixed-rate mortgages averaged 3.73 percent and rates for 15-year fixed-rate mortgages averaged 3.19 percent. Rates for 5/1 adjustable rate mortgages averaged one basis point higher at 3.37 percent.
New jobless claims fell to 234,000 claims filed as compared to expectations of 235,000 new claims filed and the prior week’s reading of 252,000 first-time claims filed.
What’s Ahead
This week’s scheduled economic news is limited due to the Christmas holiday. Data on new home sales will be released along with weekly readings on mortgage rates and new jobless claims.