Last week’s economic news included several reports related to housing and mortgages. The NAR started the week on a positive note with its Pending Home Sales Index released Monday. Pending home sales in March were higher with an unexpected increase of 3.40 percent over February for an index reading of 97.40.

This is encouraging news for home sales that were severely affected by a hard winter in many areas, and suggests that as warmer weather approaches, home sales will pick up. Analysts do not expect the rapid rate of price appreciation seen in 2013. The Fed’s tapering of its “quantitative easing” program has caused mortgage rates to rise, and last year’s rapid run-up of home prices has made affordability an issue in many areas.

The S&P Case-Shiller Home Price Index for February performed slightly better than expected with a seasonally-adjusted month-to-month reading of 0.80 percent. The expected reading was 0.70 percent.

The year-over-year reading fell short of January’s reading of 13.20 percent and the expected reading of 13.00 percent at 12.90 percent. Analysts noted the continuing trend of slowing momentum in home price growth, but seem confident that home prices will continue to increase over the spring months.

Fed Continues Tapering Of QE, Mortgage Rates Mixed

Wednesday brought the FOMC’s customary statement after its two-day meeting concluded. There were no surprises as the statement verified another monthly tapering of $10 billion from the Fed’s quantitative easing (QE) program of asset purchases.

The tapering was evenly divided with $5 billion less in MBS purchased and $5 billion less in treasury securities purchased. The ongoing tapering was seen as contributing to rising mortgage rates, but the Fed asserted that its asset purchases remain sufficient to dampen rapid increases in long-term interest rates, which include mortgage rates.

The Fed repeated its usual reminder that its decisions are not on a pre-set course and that the committee members would closely monitor economic and financial developments as guidance for future decisions.

Freddie Mac reported mixed results for mortgage rates on Thursday. Average rates rose by four basis points to 4.29 percent for a 30-year fixed rate mortgage with discount points of 0.70 percent.

The average rate for a 15-year fixed rate mortgage dropped by one basis point to 3.38 percent; discount points steady at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by two basis points to 3.05 percent; discount points dropped from 0.50 to 0.40 percent.

Weekly jobless claims made an unexpected jump to 344,000 as compared to the prior week’s revised figure of 329,000 jobless claims and an expected reading of 320,000 new jobless claims.

Analysts note that week-to-week figures continued to show volatility, but said that on balance, the rolling average for jobless claims appeared consistent with moderate growth in labor markets.

This Week

This week’s scheduled economic news shows no events related to housing and mortgages. Highlights include Fed Chair Janet Yellen’s appearance before the Joint Economic Committee in Washington, D.C. and the usual releases of mortgage rates and new jobless claims on Thursday. 

Last week’s economic news included readings on February construction spending and multiple reports on employment data.

Private sector employment was higher in March, but The Bureau of Labor Statistics reported that Non-Farm Payrolls for March fell short of expectations. According to Freddie Mac, mortgage rates ticked upward.

Employment And Unemployment News

ADP’s payrolls report for March was higher than February’s reading, with 191,000 new private sector jobs added. In February, 178,000 jobs were added. February’s reading originally showed 138,000 new jobs added.

While analysts were confident that private-sector employment was showing signs of stability, the U.S. Bureau of Labor Statistics swamped excess confidence in labor markets Friday with its March reading for Non-Farm Payrolls.

192,000 jobs were added in March against predictions of 200,000 jobs added and February’s reading of 197,000 jobs added.

The news was not all bad as job gains for January and February were revised upward. January’s job gains were revised from 129,000 to 144,000 and February’s reading was revised from 175,000 to 197,000 jobs added. The revised readings represent a total of 37,000 more jobs added.

As data impacted by severe winter weather “shakes out,” it would not be surprising to see a revision to March’s new jobless claims reading as well.

Unemployment Rate Holds Steady, Workforce Numbers Higher

While readings on employment have been up and down in recent months, the national unemployment rate has held relatively steady, with last week’s reading at 6.70 percent. 503,000 workers joined the workforce this increased the labor participation rate for March from 63 percent to 63.20 percent.

Mortgage rates were incrementally higher last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage increased by one basis point to 4.41 percent; discount points moved from 0.60 percent to 0.70 percent.

The average rate for a 15-year fixed rate mortgage rose by five basis points to 3.47 percent with discount points unchanged at 0.60 percent. 5/1 adjustable rate mortgages had an average rate of 3.12 percent, which was two basis points higher than the previous week. Discount points for 5/1 adjustable rate mortgages were unchanged at 0.50 percent.

This Week’s Economic News Highlights

Job openings for February, FOMC minutes and the University of Michigan consumer sentiment index for March are set for release this week. As usual, Freddie Mac will post results of its latest Primary Mortgage Market Survey and weekly unemployment claims will also be reported.