Lee Morof's Real Estate Blog

According to the S&P Case-Shiller Home Price Index report for January, home prices grew by 4.50 percent year-over-year as compared to  January 2014’s  year-over-year  price growth rate of 10.50 percent. This was the lowest rate of home price growth since 2012.

Analysts said that although slower growth in home prices could be good news for home buyers, national wage growth is not keeping pace with home price growth. The Labor Department reports that wages are growing at an annual rate of approximately two percent. Other obstacles to home buyers include strict mortgage standards and likely increases in mortgage rates during 2015.

Highest and Lowest Home Price Growth Rates in January

The S&P Case-Shiller Home Price Index reports that January’s five highest rates of year-over-year home price growth were:

Denver, Colorado – 8.40%
Miami, Florida – 8.30%
Dallas, Texas – 8.10%
San Francisco, California – 7.90%
Portland, Oregon – 7.20%

The five cities with the lowest year-over-year rates of home price growth were:

Chicago, Illinois – 2.50%
Minneapolis, Minnesota – 2.20%
New York, New York – 2.10%
Cleveland, Ohio – 1.60%
Washington, D.C. – 1.30%

No cities included in the 20 city index recorded no or negative growth rates on a year-over-year basis.  David Blitzer, S&P Index Committee Chair, cited growing labor markets, current low mortgage rates, lower fuel prices and low inflation as positive influences on U.S. housing markets.

The Case Shiller 20-City Housing Index report for January was also impacted by severe weather conditions that reduced demand for homes.  The 20-City Index has climbed by 29 percent since reaching March 2012 lows.

Pending Home Sales Rise

In other housing related news, pending home sales indicate that home sales are increasing as the peak spring and summer buying season gets underway. The National Association of Realtors® reported that its pending home sale index reading increased by 3.10 percent to 106.9 in February.

This was the highest reading since June 2013 and was up 12.00 percent over February 2014.  Pending home sales are sales for which a contract has been signed, but the sale has not closed. Pending home sales are considered an indicator of future home sales.

Last week’s events included the National Association of Home Builder’s Housing Market Index, which fell to its lowest reading since last summer. Other news included reports on housing starts and building permits, the FOMC meeting statement and Fed Chair Janet Yellen’s press conference.

Home Builder Confidence Falls, Building Permits Rise

The NAHB Wells Fargo Housing Market Index fell by two points for a reading of 53 in March. The expected reading was 57. Analysts said that this proves that lower mortgage rates and steady job growth aren’t fueling housing markets as expected. NAHB chief economist David Crowe also cited supply chain issues such as a shortage of available lots, labor shortages and tight mortgage underwriting standards. Home builders remain optimistic that as labor markets continue to improve and more home buyers enter the market during the traditional spring and summer buying season, that builder confidence will also grow.

The Department of Commerce reported that building permits for February rose from January’s reading of 1.06 million to 1.09 million. This represents a 3.00 percent increase and was the highest reading since October. Permits fell for single family homes fell by 6.20 percent in February, but were 2.80 percent higher year-over-year. Single family permits account for 75 percent of building permits issued.

Housing starts fell dramatically due to bad weather. The Northeast saw housing starts fall by 56 percent due to extreme snowfall; Housing starts in the Midwest fell by 37 percent and the West saw housing starts decline by 18.20 percent in February. The South reported a 2.50 percent decrease in housing starts, but since nearly 50 percent of housing starts are in the South, this decline is more significant than it appears.

Fed Rates Hold Steady, Mortgage Rates Fall

The Federal Reserve noted in its post FOMC meeting statement that the Fed is in no hurry to raise rates. Citing ongoing concerns about low inflation and a sluggish housing market recovery, the Fed’s policymakers indicated that they don’t plan to rush on raising the target federal funds rate. In her press conference held after the FOMC statement, Fed Chair Janet Yellen reiterated the Fed’s intention to raise rates only when domestic and global economic developments warrant.

Mortgage rates fell according to Freddie Mac with the average rate for a 30-year fixed rate mortgage eight basis points lower at 3.78 percent. The average rate for a 15-year mortgage was four basis points lower at 3.06 percent; the average rate for a 5/1 adjustable rate mortgage was also four basis points lower at an average rate of 2.97 percent. Discount points were unchanged at an average of 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s housing-related news includes new and existing home sales, the FHFA home price index and FHFA’s home price index. Freddie Mac mortgage rates and weekly jobless claims will also be released as usual on Thursday.

Last week’s economic reports included job openings, retail sales, retail sales except automotive, consumer sentiment for March and the usual reports on weekly jobless claims and mortgage rates.

Job Openings Highest in 14 Years

The Labor Department reported that job openings reached their highest level in 14 years in January, and rose by 2.50 percent over December 2014 job openings. On a seasonally adjusted basis, there were five million job openings in January. Job openings rose by 28 percent year-over-year.

Hiring rose by 3.50 percent to 5.24 million, but analysts said that employers continue to have difficulty in finding workers with skills needed to fill their job openings. Winter weather was also mentioned as contributing to lower hiring rates.

Stable full-time employment is a key requirement for qualifying for a home loan. Inconsistent, part-time and self-employment typically make it more difficult to qualify for mortgages in today’s conservative lending environment.

Retail Sales Lower

Retail sales fell by –0.60 percent in February against an expected reading of +0.30 percent and January’s reading of -0.80 percent. This was the third consecutive drop in retail sales volume and suggests that consumers are not confident about spending. Retail sales except automotive were also lower with a February reading of -0.10 percent against an expected reading of +0.40 percent and January’s reading of -1.10 percent.

Mortgage Rates Rise, Weekly Jobless Claims Fall

According to Freddie Mac average mortgage rates rose across the board with the rate for a 30-year fixed rate mortgage at 3.86 percent, an increase of 11 basis points. The average rate for a 15-year mortgage rose by seven basis points to 3.10 percent. The average rate for a 5/1 adjustable rate mortgage rose five basis points to 3.01 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.

Weekly jobless claims fell to 389,000 against expectations of 310,000 new jobless claims filed and the prior week’s reading of 325,000 new claims filed. This was good news after a spike in new jobless claims that was likely caused by bad weather. Although week to week data tends to be more volatile than month-to-month trends, there was good news in that new jobless claims fell below a benchmark of 300,000 new claims filed. Readings of 300,000 or fewer new jobless claims filed represent strong labor market conditions.

What’s Ahead

This week’s economic reports include the NAHB Wells Fargo Housing Market Index, federal reports on housing starts and building permits and the Federal Reserve’s FOMC meeting statement. Fed Chair Janet Yellen is scheduled to present a press conference, which analysts will watch closely for any indication of when the Fed will raise interest rates.

Last week’s economic news was light on housing related reports, but several employment reports were released along with the national unemployment rate, which dipped to 5.50 percent. This was a full point below the Federal Reserve’s original target rate of 6.50 percent. Construction spending was incrementally lower than expected and mortgage rates also fell.

Fewer Private-Sector Jobs, Non-Farm Payrolls Increase

The ADP employment report for February fell from January’s reading of 250,000 jobs to 212,000 private-sector jobs. January’s reading was upwardly revised from the original tally of 213,000 jobs added. News was better for Non-Farm Payrolls for February. The Labor Department reported that 295,000 jobs were added; analysts expected a reading of 238,000 new jobs based on January’s original reading of 257,000 jobs added, but January’s reading was revised to 239,000 jobs added. The Non-Farm Payrolls report includes both public and private-sector jobs.

Weekly jobless claims rose to 320,000 against expectations of 301,000 new claims and the prior week’s reading of 313,000 new jobless claims. The week-to-week jobless claims report is considered volatile; most analysts base forecasts on a four-week rolling average.

National unemployment decreased from 5.70 percent in January to 5.50 percent in February as compared to an expected reading of 5.60 percent. February’s reading was the lowest since May 2008. Construction added 29,000 in February, which could indicate a boost in home construction. The unemployment rate does not account for 17.50 million workers who work part-time but want full-time work and those who have left the job market. The labor market participation rate fell to 62.8 percent, which was its lowest since the late 1970s.

Analysts said that based on the lower unemployment rate, the Fed may move as soon as June to raise the target federal funds rate to prevent rapid inflation, but Federal Reserve policy makers have consistently cited concerns over labor markets as a reason why the fed funds rate hasn’t been raised. A combination of stagnant wages, higher mortgage rates combined with stubbornly strict mortgage credit requirements could cause housing markets to lag behind other economic sectors until would-be home buyers achieve steady employment and can qualify for home financing.

Mortgage Rates Drop

Freddie Mac provided good news as average mortgage rates dropped.  Last week’s rate for a 30-year mortgage was 3.75 percent and lower by five basis points; the average rate for a 15-year fixed rate mortgage dropped by four basis points to 3.03 percent and the average rate for a 5/1 adjustable rate mortgage was three basis points lower at 2.96 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s economic news includes reports on job openings and labor market conditions along with retail sales reports. Consumer sentiment will be release and Freddie Mac mortgage rates and weekly jobless claims data will be released as usual on Thursday.

Last week provided several housing-related reports including New Home Sales, Pending Home Sales and Existing Home Sales reports. Case-Shiller and FHFA also released data on home prices. The details:

Sales of Pre-Owned Homes Hit Nine-Month Low

According to the National Association of Realtors® (NAR), Sales of pre-owned homes dropped to a seasonally-adjusted annual reading 4.82 million sales in January as compared to an estimated reading of 4.95 million sales and December’s reading of 5.07 million existing homes sold. This was a month-to-month decline of 4.90 percent, and represented the lowest reading for existing home sales in nine months.

Lawrence Yun, chief economist for the NAR, said that a short supply of available homes coupled with rising prices contributed to the drop in sales. While mortgage rates remain near historical lows, higher home prices and short supply are negatively impacting affordability; this puts home buyers who rely on mortgages in competition with cash buyers.

More encouraging news arrived with the Commerce Department’s new home sales report; new home sales reached 481,000 sales on a seasonally-adjusted annual basis in January. Analysts had expected new home sales of 467,000 new homes based on December’s reading of 482,000 new homes sold in December.

Pending Home Sales Highest Since August 2013

The National Association of Realtors® reported that pending home sales rose by 1.70 percent in January as compared to December’s reading of -3.70 percent. Pending sales were up 8.40 percent year-over-year. Job growth, a little more leniency in mortgage credit standards and slower inflation were seen as factors that contributed to higher pending sales. Pending sales represent under sales contracts that have not closed.

Case-Shiller, FHFA Post Home Price Data

The Case Shiller 20-City Composite reported that home prices rose by 0.10 percent month-to-month and 4.50 percent year-over-year according to its index report for December. San Francisco, California had the highest year-over-year price gain at 9.30 percent, while Chicago, Illinois had the lowest year-over-year home price appreciation rate at 1.30 percent as of December.

FHFA reported that home prices for properties connected with Fannie Mae and Freddie Mac loans rose by 5.40 percent on a year-over-year basis as compared to November’ year-over-year reading of a 5.20 percent increase in home prices.

Mortgage Rates Rise

Freddie Mac reported that average mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by four basis points to 3.80 percent; the average rate for a 15-year fixed rate mortgage increased by two basis points to 3.07 percent and the rate for a 5/1 adjustable rate mortgage was also two basis points higher at 2.99 percent. Discount points for all loan types were unchanged at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

What’s Ahead?

This week’s scheduled economic news includes consumer spending, construction spending and the Labor Department’s non-farm payroll and national unemployment reports. Weekly jobless claims and Freddie Mac’s PMMS report on mortgage rates will be released as usual on Thursday.

December home prices rose by 0.10 percent according to the Case-Shiller 20-City Home Price Index. The composite report tracks home prices in 20 U.S. cities. December’s results boosted home prices by 4.50 percent year-over-year, which is approximately double the inflation rate for 2014. Analysts note that the overall reading was less significant than individual readings for the 20 cities included in the report.

Regional Home Prices Suggest Disparity in Housing Recovery

The top three month-to-month home price increases for cities surveyed were led by Miami, Florida with an increase of 0.70 percent, Home prices rose by 0.50 percent in Denver, Colorado, and by 0.50 percent in San Francisco, California.

Chicago, Illinois posted a month-to-month loss of -0.90 percent; Cleveland, Ohio followed with a loss of -0.50 percent, and Las Vegas, Nevada and Minneapolis, Minnesota were tied with monthly losses of -0.30 percent for home prices.

Winter weather conditions and the holidays can dampen demand for homes; it’s worthwhile to note that three of the cities posting the largest month-to-month losses are located in cold winter climates.

Month-to-month readings for home prices are typically more volatile; the corresponding year-over-year readings provide a more accurate reading of real estate trends in specific cities. Nine cities posted month-to-month gains for home prices, while six cities posted lower home prices from November to December.

San Francisco Leads Year-over-Year Home Price Growth

San Francisco, California led year-over-year home price growth with a reading of 9.30 percent. Home prices grew by 8.40 percent in Miami, Florida. Denver, Colorado home prices grew by 8.10 percent year-over-year in December.

The three cities showing the least amount of home price growth year-over-year were Chicago, Illinois with a reading of 1.30 percent, Cleveland, Ohio and Washington, D.C. were tied with year-over-year readings of 1.30 percent growth in home prices year-over-year.

Home prices are growing more slowly in the North and Midwest regions, while home prices continue to grow fastest in the Southeast and Western regions.

Home prices in the cities surveyed have increased by 29 percent since the March 2012 low, but remain 16 percent below their July 2006 peak. The Case-Shiller Home Price Index measures home prices using a three-month rolling average, while other home price reports base their readings on monthly sales. Case-Shiller’s year-over-year reading of 4.50 percent for December of 2015 closely approached CoreLogic’s reading of 5.00 percent home price growth year-over-year.

While increasing home prices are good news for homeowners, higher home prices represent an obstacle for moderate income and first time home buyers, who are also impacted by strict mortgage credit standards. As the peak home buying season approaches, increased demand for homes could drive home prices higher.

Last week’s housing related reports included the National Association of Home Builders (NAHB) Housing Market Index for February, The Commerce Department’s report on Housing Starts for January and Freddie Mac’s weekly report on average mortgage rates. The Federal Reserve released the minutes of January’s FOMC meeting, which indicated that FOMC members are in no hurry to raise the target federal funds rate. The details:

Home Builder Confidence, Housing Starts Impacted by Winter Weather

The NAHB Housing Market Index for February fell from January’s reading of 57 to 55. Analysts expected a reading of 59. This was the lowest reading since October, but February’s reading remains above the benchmark of 50. Readings exceeding 50 indicate that more home builders are confident about housing market conditions than not.

According to the NAHB, harsh weather contributed to lower builder confidence in February. NAHB Chief Economist David Crowe said that low mortgage rates, increasing affordability and improving job markets are helping home buyers.

The NAHB Housing Market Index is calculated based on three components. Builder confidence dropped by one point to a reading of 61 for current housing market conditions. Not surprisingly, the winter weather caused buyer foot traffic to drop five points to a reading of 39. A gauge of housing market conditions in the next six months was unchanged.

Regional readings showed declines in three of four regions: The Northeast saw a one-point drop to 46; the Midwest and South dropped by two points to readings of 54 and 57. The Western region gained two points for a reading of 68.

The U.S. Commerce Department reported that January’s Housing Starts dropped from 1.09 million in December to 1.07 million in January; the reading for January matched analysts’ expectations.

Weekly jobless claims provided some good news; they dropped from the prior week’s reading of 304,000 new claims to 283,000 new claims. The expected reading was 290,000 new jobless claims.

Mortgage Rates Rise, Points Unchanged

Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage rose by seven basis points to 3.76 percent; the average rate for a 15-year fixed rate mortgage increased by six basis points to 3.05 percent and the average rate for a 5/1 adjustable rate mortgage was unchanged at 2.97 percent. Discount points were unchanged at 0.6 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

What’s Ahead

Next week’s scheduled economic news includes several reports related to housing. New and existing home sales reports will be released along with the Case-Shiller Composite Housing Market reports. FHFA will release its House Price Index Report and Fed Chair Janet Yellen is set to testify before Congress. Reports on Consumer Sentiment and Consumer Confidence are also scheduled along with weekly reports on jobless claims and mortgage rates.

Last week’s economic news included an index of labor market conditions provided by the Federal Reserve, a report on small business sentiment, and a report from the Labor Department on job openings. Weekly jobless claims, Freddie Mac’s mortgage rates report and a report on Consumer Sentiment rounded out the week. The details:

Labor Market Conditions, Small Business Index Reports Fall

According to the January reading for a labor index report released by the Federal Reserve, labor market conditions declined from December’s reading of 7.3 to January’s reading of 4.9. This index is based on 19 economic indicators and January’s reading was the lowest since September. The National Foundation for Independent Business (NFIB) reported that its index of small business sentiment fell to 97.9 in January as compared to December’s reading of 100.4. Analysts said that this report reflected less optimism about business conditions and sales growth rather than concerns over spending and hiring plans.

In other labor–related news, the Labor Department reported that job openings rose to 5.03 million in December; this was 3.70 percent higher than November’s reading and represented a year-over-year increase in job openings of 28.50 percent. In contrast, all hiring for 2014 increased by 12.50 percent, which suggested that employers may be having trouble finding employees with needed job skills.

Jobless Claims Rise, but Four Week Average Shows Drop in New Claims

According to the Labor Department’s weekly Jobless Claims report, 304,000 new unemployment claims were filed, which once again positioned new jobless claims over the key benchmark of 300,000 new jobless claims filed. Analysts expected a reading of 296,000 new jobless claims based on the prior week’s reading of 279,000 new claims. To put this in perspective, new jobless claims have fallen by 3250 claims over the past four weeks to a reading of 289,750 new claims. Economists say that the four-week average is a more accurate measure of developing trends, as week-to-week readings can be volatile.

Mortgage Rates Rise

Last week’s only scheduled mortgage-related news was Freddie Mac’s weekly survey of average U.S. mortgage rates. Rates were higher with the average rate for a 30 year fixed rate mortgage higher by 10 basis points at 3.60 percent. The average rate for a 15-year fixed rate mortgage rose by eight basis points to 2.99 percent. The average rate for a 5/1 adjustable rate mortgage jumped to 2.97 percent from the previous week’s average of 2.82 percent. Average discount points were 0.60 percent for 30 and 15-year fixed rate mortgages and averaged 0.50percent for a 5/1 adjustable rate mortgage.

February’s Consumer Sentiment Index dipped as fears of rising inflation caused consumer sentiment to dip from January’s reading of 98.1 and expectations of February’s reading at 98.5; unfortunately, February’s actual reading fell short at 93.6. February’s reading was a three-month low after January’s reading hit an 11-year high. Fears of growing inflation were noted as an influence on the drop in consumer sentiment; fuel prices are rising, which will contribute to rising inflation.

What’s Ahead

No economic reports were scheduled Monday due to the President’s Day holiday. The National Association of Home Builders (NAHB) releases its housing market index report on Tuesday, Housing Starts will be released Wednesday along with the minutes of the most recent FOMC meeting. Weekly jobless claims, Freddie Mac’s mortgage rates survey and Leading Economic Indicators round out this week’s scheduled reports.

Last week’s economic news included construction spending, which fell shy of expectations but exceeded the prior month’s spending, and several consumer and labor-related reports. The details:

Mortgages More Accessible: Fed Survey

A Federal Reserve survey of senior loan officers at 73 U.S. banks and 23 branches of foreign banks indicated that mortgages may be more accessible. While banks eased credit standards for mortgages eligible for purchase by Fannie Mae and Freddie Mac, consumer demand for mortgages fell over the last three months. This seems puzzling given lower mortgage rates, but mortgage lending rules remain tough for borrowers with less than pristine credit.

Mortgage rates dropped last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage was 3.59 percent with discount points higher at 0.70 percent. The average rate for a 15-year fixed rate mortgage was seven basis points lower at 2.92 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was four basis points lower at 2.82 percent with discount points unchanged at 0.40 percent.

Lower mortgage rates are great news for home buyers and homeowners seeking to refinance, but only if mortgage loans are available.

Construction Spending Higher, Consumer Spending Drops, Inflation Stalls

According to the Department of Commerce, Construction Spending rose by 0.40 percent in December against November’s reading of -0.20 percent and expectations of 0.70 percent growth. December’s reading represented $981.2 billion in construction spending on a seasonally-adjusted annual basis. Residential construction rose by 0.30 percent.

Consumer spending fell by -0.30 percent and was consistent with analysts’ expectations. This was the highest month-to-month drop in consumer spending since September 2009. Consumers spent less on vehicles and fuel. Lower fuel prices were seen as the driving force behind less consumer spending. Core personal expenditures did not increase in December. Core inflation, which excludes volatile food and energy sectors, was well below the Fed’s target annual inflation rate of 2.00 percent with a reading of 1.30 percent year-over-year.

Labor Reports: Mixed Signals

Weekly jobless claims rose to 278,000 against the prior week’s reading of 267,000 new jobless claims, but claims were lower than the expected reading of 290,000 new jobless claims. Nonfarm payrolls for January were higher in January at 257,000 jobs added. Analysts expected only 230,000 new jobs added in January based on December’s reading of 267,000 jobs added.

ADP Payrolls reported 213,000 private sector jobs added in January against December’s reading of 253,000 private sector jobs added. January’s lower reading is likely based on seasonal hiring during the holiday season. National Unemployment rose from December’s reading of 5.60 percent to 5.70 percent. In recent months national unemployment rates have fallen below the Fed’s target reading of 6.50 percent.

What’s Ahead

This week’s scheduled economic reports include data on retail sales, job openings, labor market conditions and weekly reports on new jobless claims and Freddie Mac’s survey of mortgage rates.

Last week’s economic reports included Case-Shiller 10 and 20-City Home Price Index reports for November along with new and pending home sales for December. Freddie Mac reported on average mortgage rates and new jobless claims dipped unexpectedly. The details:

Case-Shiller: Home Price Growth Slower in November

Case-Shiller’s 20-City Home Price Index for November indicated that home prices continue to slow across the nation. Seasonally-adjusted annual home price growth slowed to 4.30 percent from October’s reading of 4.50 percent. Slowing momentum in year-over-year home price growth placed downward pressure on month-to-month readings. Several cities, including Atlanta, Georgia, Boston Massachusetts and Cleveland Ohio reported lower home prices in November as compared to October. Chicago, Illinois surprised analysts with a -1.10 percent drop in home price growth for November. Although mortgage rates have fallen in recent weeks, analysts cited tough mortgage approval standards, lower demand for homes and growing inventories of available homes as factors contributing to sluggish housing markets.

New and Pending Home Sales: Mixed Readings

New home sales jumped to a seasonally-adjusted annual reading of 481,000 sales in December against expectations of 455,000 sales and November’s revised reading of 431,000 new homes sold. The original reading for November was 438,000 new homes sold. New home sales were 8.80 percent higher in December year-over-year. The median price of new homes was $298,100 in December, which was an increase of 8.20 percent year-over-year.

Pending home sales reflected sluggish market conditions in December with pending sales lower by -3.70 percent as compared to November’s reading of +0.60 percent. This lull will likely impact completed sales as pending sales generally forecast completed sales within the next 60 days. The National Association of Realtors® said that home prices rose in some areas as supplies dwindled. Fewer homeowners list homes for sale during the fall and winter months than during spring and summer. Analysts also said that home sales trends rely on the willingness of homeowners to list their homes and move up. Although the economy continues to grow, homeowners can impact supplies of available homes if they wait to move up to larger homes.

Mortgage Rates Rise, New Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose last week. The average rate for a 30-year fixed rate mortgage was three basis points higher at 3.66 percent; the average rate for 15-year mortgages rose by five basis points to 2.98 percent, and the average rate for a 5/1 adjustable rate mortgage was 2.86 percent. Discount points fell to 0.60 percent for 30-year mortgages and 0.50 percent for 15-year mortgages. Discount points were unchanged at0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 265,000; this was lower than the expected reading of 296,000 new jobless claims and the prior week’s reading of 308,000 new jobless claims. Analysts said that the short work week likely contributed to the drop in weekly jobless claims, which was the largest drop in new jobless claims since November 2012. As labor markets improve, more consumers can afford to buy homes. January’s Consumer Confidence Index rose more than expected in January with a reading of 102.9 against expectations of 96.90 and December’s reading of 93.10.

What’s Ahead

This week’s scheduled reports include Construction Spending, Personal Income, Core Inflation, and several employment reports including ADP Payrolls, Non-Farm Payrolls and the national unemployment rate. Freddie Mac’s mortgage rates report and new unemployment claims will be released on Thursday as usual.