Weekly Update 2/12/2024
Weekly Rate Summary*
🔼Conventional | 6.875% | APR 6.909%🔼
🔼High Balance | 7.125% | APR 7.141%🔼
🔼Jumbo | 6.625% | APR 6.633%🔼
🔼FHA | 6.250% | APR 6.988%🔼
🔼VA | 6.250% | APR 6.474%🔼
*Rates are based on 780 FICO® Score and 30-day rate lock for a single-family, owner-occupied property purchase. LTVs are as follows, 70% for Conventional, High Balance, and Jumbo, 96.5% for FHA, and 100% for VA. Actual interest rates may vary depending on loan-to-value, credit score, and other criteria. Rates may include discount points at or near zero points. Rates are subject to change daily. Rates are subject to change without notice.
Week of February 12th, 2024
The latest appreciation and inventory data show why housing remains a great avenue for wealth creation. Read on for more details in these headlines:
Home Prices Expected to “Extend to New Highs”
The Real Story on Existing Home Inventory
Is a Rise in Initial Unemployment Claims Ahead?
Home Prices Expected to “Extend to New Highs”
Black Knight released their Home Price Index for November and December, and home values rose 0.1% in each of those months. Prices were also 5.6% higher than in December 2022.
CoreLogic also released their latest Home Price Index, which showed that national home values fell 0.1% from November to December. While this monthly figure was slightly different than Black Knight’s, CoreLogic’s 2023 level of appreciation was nearly equivalent, with home values up 5.5% last year.
CoreLogic forecasts that home prices will fall 0.2% in January and rise 2.8% in the year going forward, though it’s worth noting their forecasts tend to be on the conservative side historically. For example, CoreLogic originally forecasted that we would see 3% appreciation in 2023 but we saw 5.5%. Plus going back to 2021, they had forecasted a 6.6% decline in home values, and we saw a nearly 19% gain instead.
What’s the bottom line? The rise in home prices reported by CoreLogic and Black Knight has been echoed by other major indices like Case-Shiller and the Federal Housing Finance Agency, showing that now remains a great opportunity for building wealth through real estate. CoreLogic’s Chief Economist, Dr. Selma Hepp, also noted that “home prices will continue to extend to new highs entering the typically busy spring homebuying season.”
The Real Story on Existing Home Inventory
The National Association of REALTORS (NAR) recently reported that there were just 1 million homes available for sale at the end of December, which was down 11.5% from November’s 1.13 million available homes.
But these numbers don’t tell the whole story! Many homes counted in existing inventory are under contract and not truly available for purchase. In fact, there were only 666,000 “active listings” in January, well below what’s counted in NAR’s reporting and less than half of what we would expect to see in a normal market.
What’s the bottom line? Tight supply is going to remain a reality for some time. Many homeowners with low-rate mortgages are holding on to their property instead of listing it for sale. Plus, demand is only expected to rise, especially if rates move lower this year and more buyers decide to resume their home search. Fannie Mae’s latest Home Purchase Sentiment Index showed that an all-time survey high 36% of respondents said they expect mortgage rates to decline in the next 12 months.
This ongoing disparity between supply and demand is a key reason why home values continue to rise and why now provides great opportunities to take advantage of appreciation gains.
Is a Rise in Initial Unemployment Claims Ahead?
The number of people filing new unemployment claims was lower than expected in the latest week, as Initial Jobless Claims fell by 9,000 to 218,000. Continuing Claims also declined by 23,000, with 1.871 million people still receiving benefits after filing their initial claim.
What’s the bottom line? While Initial Jobless Claims are still relatively low, the four-week average is near the highest level since December. There have also been some high-profile layoff announcements recently, and these numbers could be reflected in future initial unemployment filings.
In addition, Continuing Jobless Claims are hovering around the highest levels since 2021, suggesting that people are having a harder time finding new employment once they’re let go.
Surprising Uptick in December’s Job Openings
The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings were stronger than expected in December, rising from 8.925 million in November to 9.026 million. The hiring rate rose from 3.5% to 3.6% while the quit rate remained at 2.2%, suggesting there’s a lack of employers trying to entice workers with other offers.
What’s the bottom line? While the Fed watches this report to monitor slack in the labor market, there are flaws in the data. The increase in working from home means job listings are being posted in multiple states more frequently. As a result, they’re being overcounted in the JOLTS total so the report may be weaker than the headlines suggest, especially given the number of high-profile companies that have announced
layoffs recently.
Unemployment Claims Rise for Second Straight Week
The latest weekly Initial Jobless Claims reached their highest level since November, as 224,000 people filed for unemployment benefits for the first time. Continuing Claims also surged higher, up 70,000 with 1.898 million people still receiving benefits after filing their initial claim.
What’s the bottom line? Both Initial and Continuing Jobless Claims have risen over the last two weeks to nearly three-month highs. Plus, the latest Job Cuts report from Challenger, Gray & Christmas showed that announced layoffs in January surged from December, and this could be reflected in future Unemployment Claim filings.
Family Hack of the Week
Dish up this Cherry Almond Coffee Cake courtesy of Taste of Home, perfect for brunches, afternoon snacks and National Almond Day on February 16.
Ingredients
2 1/2 cups all-purpose flour
3/4 cup + 1/4 cup sugar, divided
3/4 cup cold butter, cubed
1/2 teaspoon baking powder
1/2 teaspoon baking soda
1/4 teaspoon salt
1 cup sour cream
2 eggs, divided
1 teaspoon almond extract
8 ounces cream cheese, softened
1 cup cherry preserves
1/2 cup sliced almonds
Steps
Preheat your oven to 350 degrees Fahrenheit. Grease a 9-inch springform pan.
In a large bowl, mix together 2 1/2 cups of all-purpose flour and 3/4 cup of sugar.
Cut in 3/4 cup of cubed cold butter into the flour mixture until it becomes crumbly. Reserve 1/2 cup of this crumb mixture for the topping.
To the remaining flour mixture, add 1/2 teaspoon baking powder, 1/2 teaspoon baking soda, and 1/4 teaspoon salt. Stir to combine.
Stir in 1 cup of sour cream, 1 egg, and 1 teaspoon almond extract until the batter is well mixed.
Spread the batter onto the bottom of the prepared springform pan.
In a small bowl, beat 8 ounces of softened cream cheese with 1/4 cup of sugar until smooth.
Add 1 egg to the cream cheese mixture and beat on low speed until just blended.
Pour the cream cheese mixture over the batter in the pan.
Spoon 1 cup of cherry preserves over the cream cheese layer.
Sprinkle the reserved crumb mixture and 1/2 cup of sliced almonds on top of the cherry preserves.
Bake in the preheated oven until the top is golden brown, which should take about 50 to 60 minutes.
Allow the coffee cake to cool on a wire rack for 15 minutes before serving.
Enjoy your Cherry Almond Cream Cheese Coffee Cake, a perfect treat for any occasion!
What to Look for This Week
Critical inflation reports could impact the markets, starting Tuesday when January’s Consumer Price Index is released. The Producer Price Index, which measures wholesale inflation, will be reported on Friday.
Housing data will also make headlines. Builder confidence for February from the National Association of Home Builders releases on Thursday and January’s Housing Starts and Building Permits follows on Friday.
Thursday also brings the latest Jobless Claims, manufacturing data for the New York and Philadelphia regions, and January’s Retail Sales.
Mortgage Bonds ended last week trading in a range between support at 100.614 and overhead resistance at the 25-day and 50-day Moving Averages.
The 10-year is trading in a range with support at the 200-day Moving Average and a ceiling of resistance at 4.20%, which is keeping a lid on yields for now.