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What’s Ahead For Mortgage Rates This Week – May 22, 2023

What's Ahead For Mortgage Rates This Week - May 22, 2023Last week’s economic reporting included readings on U.S. housing markets, sales of previously-owned homes, housing starts, and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: U.S. Home Builder Confidence Rises in May

The National Association of Home Builders reported a five-point gain in home builder confidence in current housing market conditions in May. The index reading for May rose to 50 in May as compared to April’s reading of 45. Analysts expected a reading of 45 for May. Readings above 50 indicate a majority of home builders are positive about current housing market conditions. Component readings of the home builder index also rose as the gauge for current market conditions rose by five points to 50; the reading for market conditions over the next six months rose by seven points and the index reading for buyer traffic increased by two points.

Builders surveyed indicated that homeowners aren’t motivated to sell as many of them bought or refinanced their homes during the pandemic when mortgage rates were very low. Aspiring homeowners are turning to new homes for more options as demand for homes continues to outpace the number of previously-owned homes available.

 Higher demand for homes caused developers to reduce incentives to homebuyers. Homebuilders offering price reductions on new homes fell from 30 percent in April to 27 percent in May.  NAHB said home price reductions averaged six percent of original home prices.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 6.39 percent and were four basis points higher than for the previous week. Rates for 15-year fixed-rate mortgages averaged 5.75 percent, which was unchanged from the prior week.

242,000 initial jobless claims were filed last week as compared to 255,000 expected claims and 264,000 first-time jobless claims filed in the prior week.

What’s Ahead

This week’s scheduled economic reporting includes readings on new and pending home sales, minutes from the recent Federal Open Market Committee meeting, and the final consumer sentiment reading for May. Weekly readings on mortgage rates and jobless claims will also be released.


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