Home borrowing costs inched higher this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 2.81% from 2.73% with 0.7 in points and fees. A year ago at this time, the rate averaged 3.49%. Sam Khater, Freddie Mac’s Chief Economist, said, “Reaching its highest point since mid-November, the 30-year fixed-rate mortgage averaged 2.81% this week. While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3% range for the year.”
First-time unemployment claims remain stubbornly high while 10 million Americans are still without a job. Displaced workers filing for first-time unemployment benefits rose to 861,000 for the week ended February 13, 2021 from 848,000 in the previous week. to 793,000 from 812,000. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,494,000 from 4,558,000. Several of the states that were under lockdown measures have slowly begun to open up. When the economy fully reopens many workers should be able to go back to work.
The Census Bureau reports that Housing Starts were down 6% in January to an annual rate of 1,580,000 versus the 1,670,000 expected. It was the first monthly decline since August 2020. A jump in lumber costs has curtailed some building projects. Starts were down 2.3% year over year. Single-family starts were down 12% monthly and up 17% annually. Multi-family dwellings were up 16% monthly and down 35% annually. Building Permits, a sign of future construction, jumped 10% to 1,881,000 versus the 1,670,000 expected. That is a very strong number which suggests builders "expect" to be building more in the future.
Mortgage rates inch higher. First-time unemployment benefits remain elevated. Housing Starts stall.
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