What’s Ahead For Mortgage Rates This Week – June 19, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on June 19th, 2017

Last week’s economic reports included readings on inflation, core inflation, and the Federal Reserve’s FOMC statement. The NAHB Housing Market Index, housing starts and building permits issued were also released, along with weekly readings on mortgage rates and new jobless claims.

Inflation fell by -0.10 percent in May, which was lower than the no-change reading expected by analysts based on April’s reading of +0.20 percent. The core inflation reading for May, which excludes volatile food and energy sectors, grew by 0.10 percent. Analysts had estimated a gain of 0.20 percent based on April’s reading of 0.10 percent growth.

Builder Confidence Slips, Housing Starts and Building Permits Lower

The National Association of Home Builders Housing Market Index was two points lower in June with an index reading of 67. Each of the three component readings for the HMI was also two points lower than May’s readings. While any reading over 50 is considered positive, builders cited ongoing concerns with shortages of lots and labor challenges to builder confidence and new home construction.

Housing starts and building permits issued were lower in May. 1.09 million starts were reported on a seasonally-adjusted annual basis as compared to expectations of 1.23 million starts and April’s reading of 1.16 million starts. Builders started fewer multi-family housing developments and concentrated on single-family homes. Housing starts fell year-over year and were lower for the third consecutive month.  Fewer building permits were issued in May according to the Commerce Department. Building permits were 4.90 percent lower than in April and hit a 13-month low.

Mortgage Rates Rise, Fed Raises Target Federal Funds Rate

Freddie Mac reported higher mortgage rates last week. The average rate for a 30-year fixed rate mortgage rose three basis points to 3.91 percent; the average rate for a 15-year fixed rate mortgage increased by two basis points to 3.18 percent. Rates for a 5/1 adjustable rate mortgage rose four basis points to 3.15 percent on average. Discount points averaged 0.50 percent for all three mortgage types and were unchanged from the prior week.

The Federal Reserve’s Federal Open Market Committee raised the target federal funds rate to 1.00-1.25 percent as expected. Consumer loan and mortgage rates typically rise along with the federal funds rate. Last week’s dip in the inflation rate could cause rates to fall in coming weeks.

New jobless claims fell to 237,000 last week as compared to an expected reading of 244,000 new claims and the prior week’s reading of 245,000 new jobless claims. Strong readings in the labor sector suggest that job markets are healthy, but can also be influenced by workers leaving the workforce. Unemployment claims require workers to be actively seeking employment.

Consumer sentiment fell to an index reading of 94.50 in June as compared to an expected reading of 97.30 and May’s index reading of 97.10. The University cited consumer uncertainty related to recent political events as the cause of waning consumer confidence.

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What’s Ahead For Mortgage Rates This Week – June 12, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on June 12th, 2017

Last week’s economic news was slim, with few scheduled reports released. Job openings for April, along with weekly readings on mortgage rates and weekly jobless claims were released. Job openings rose in April, while weekly jobless claims were lower. The headline event last week was a further decrease in fixed-rate mortgage interest rates.

Mortgage Rates Lowest in Almost 7 Months

Freddie Mac reported that average rates for fixed rate home loans fell again last week. Mortgage rates typically follow 10-year Treasury yields, which also fell last week. The average rate for a 30-year fixed rate mortgage dropped five basis points to 3.89 percent; the average rate for a 15-year fixed rate mortgage was three basis points lower at 3.16 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at 3.11 percent; discount points for all three mortgage types were also unchanged at an average of 0.50 percent.

Analysts cited mixed economic reports and uncertainty as factors contributing to lower mortgage rates. After months of short supplies of homes and high demand coupled with rapidly increasing home prices, first-time and moderate- income home buyers may gain a foothold in some housing markets that were previously inaccessible.

New Jobless Claims Fall, Job Openings Increase

First-time jobless claims were lower last week with 245,000 new claims filed as compared to an expected reading of 245,000 new claims and the prior week’s reading of 255,000 new jobless claims. In related news, job openings were higher in April with a reading of 6.0 million job openings as compared to 5.80 million job openings in March. Fewer new jobless claims coupled with more job openings suggests that layoffs are not driving new jobless claims.

Whats Ahead

Next week’s scheduled economic reports include readings on Inflation, core inflation, and the Federal Open Market Committee of the Federal Reserve will release its post-meeting statement. Fed Chair Janet Yellen is set to give a press conference after the FOMC statement. The FOMC statement will indicate if the Fed will raise its target federal funds rate. The National Association of Home Builders will release its Housing Market Index for June. Weekly readings on mortgage rates and new jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – June 5, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on June 5th, 2017

Last week’s economic releases included readings on inflation, core inflation pending home sales and multiple reports from the labor sector. Weekly readings on mortgage rates and new jobless claims were also released. Pending home sales were lower and weekly jobless claims rose, which illustrates continued volatility in the economic sector.

Inflation rose 0.40 percent in April, which matched projections and exceeded April’s reading of 0.30 percent. Core inflation, which excludes volatile food and energy sectors, grew by 0.20 percent and exceeded expectations of 0.10 percent growth based on a negative reading of -0.20 percent in March. The Federal Reserve has set an annual inflation rate of 0.20 percent as a benchmark for economic recovery.

Housing Data Mixed

Case-Shiller released its 20-City Housing Market Index for March; Home price appreciation held steady at 5.90 percent on a seasonally-adjusted basis year-over-year. Month-to-month, home prices rose by 0.90 percent. Seattle, Washington had the highest pace of home price growth in March, with 12.30 percent. Portland, Oregon followed with 9.20 percent home price growth and Dallas, Texas had the third highest level of year-over-year home price growth at 8.60 percent. Month-to-month home prices grew at a pace of 0.90 percent.

Despite indications of high builder confidence in current and future housing market conditions, construction spending decreased by -1.40 percent in April. Analysts expected an increase of 0.50 percent in construction spending based on construction spending growth of 1.10 percent in March.

Builders have consistently cited concerns over affordable lots and skilled labor, but industry professionals are not sure why high builder confidence in housing markets doesn’t correspond to lagging construction spending rates. Building more homes is viewed as the only path to easing high demand for homes caused by a shortage of homes for sale.

The Commerce Department reported fewer pending home sales in April with a reading of -1.30 percent; the March reading was -0.90 percent. Pending home sales typically indicate further closed sales and trends in mortgage loans.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported slight change in mortgage rates last week; the average rate for a 30-year fixed rate mortgage was one basis point lower 3.94 percent. Rates for a 15-year fixed-rate mortgage averaged 3.19 percent and was unchanged from the prior week. The average rate for a 5/1 variable rate mortgage rose four basis points to 3.11 percent. Discount points averaged 0.50 percent for all three types of mortgages.

New Jobless Claims Hit 5Week High

First-time claims rose from the prior week’s reading of 235,000 new claims to 248,000 new claims filed. Analysts had expected 239,000 new claims filed. Analysts said that higher claims were connected to the Memorial Day holiday and characterized last week’s higher number of claims as a “blip.”

In other labor-sector news, ADP reported 253,000 new private-sector jobs in May; the Commerce Department reported 138,000 new government and private sector jobs. This reading may be revised based on an expected 185,000 public and private-sectors jobs for May and April’s reading of 174,000 public and private-sector jobs.

National unemployment ticked down in May to 4.30 percent. Analysts had expected no change in April’s reading of 4.40 percent.

Whats Ahead

This week’s scheduled economic news includes readings on job openings, consumer credit along with weekly reports on mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – May 30, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on May 30th, 2017

Sales of new and previously owned homes were lower in April after reaching near-record levels in March. Mortgage rates were lower last week and new jobless claims were little changed.

New Home Sales Fall in April; March Reading Revised

New home sales were lower in April after moving higher in March. The Commerce Department revised March figures for new home sales to 642,000 sales on a seasonally-adjusted annual basis. April sales of new homes fell by 11.40 percent to 569,000 new home sales, which fell shy of 605,000 expected sales in April. Sales of new homes reported by the government are based on small samples and are frequently revised, so a month-to-month readings are subject to change. New home sales were 11 percent higher for the first four months of 2017 than for the same period in 2016.

Home prices are showing signs of cooling; the median price for a new home fell to $309,000 in April as compared to $318,700 in March. Lower prices increase affordability and may encourage more buyers into the market. In March, there was a 4.9 percent supply of available homes as compared to April’s 5.70 months inventory. Real estate pros typically consider a 6- month supply of available homes a good balance between homes available and prospective buyers.

The National Association of Realtors® reported fewer sales of pre-owned homes in April than for March. 5.57 million pre-owned homes were sold in April as compared to an expected reading of 5.60 million sales. Projected sales were based on 5.70 million sales of previously owned homes in March. Low inventories of homes for sale has stifled demand as would-be buyers wait for a larger choice of homes.

Mortgage Rates Lower

Freddie Mac reported lower mortgage rates across the board for the three types of mortgages reported. The average rate for a 30-year fixed rate dropped seven basis points to 3.95 percent; the rate for a 15-year fixed rate mortgage was eight basis points lower at 3.19 percent and the average rate for a 5/1 adjustable rate mortgage fell six basis points to 3.07 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose from the prior week’s reading of 233,000 new claims to 234,000 new claims filed last week.

Whats Ahead

This week’s scheduled economic news includes readings on inflation, core inflation, Case-Shiller Home Price Indices, and construction spending. Pending home sale and multiple labor-related reports will be released along with weekly readings on mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – May 22, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on May 22nd, 2017

Last week’s economic reports included readings from the National Association of Home Builders, Commerce Department readings on housing starts and building permits and weekly reports on mortgage rates and new jobless claims.

NAHB Housing Market Index Rises, Exceeds Expectations

Builder Sentiment rose two points in May, which exceeded expectations of no change to April’s reading of 68. Builders and analysts said that short inventories of available homes continue to drive demand for new homes. While index readings jumped immediately after the Presidential election in November, builder enthusiasm settled when tariffs on lumber were increased.

Two of three components used in calculating the NAHB Housing Market Index reading. Builder confidence in current housing market conditions gained two points to a reading of 76; Confidence in market conditions over the next six months gained four points to 79. The reading for buyer traffic in new home developments fell one point to 51. Any reading over 50 is considered positive in NAHB HMI reports.

Housing Starts, Building Permits Lower in April

Despite rising home builder confidence in current and future housing markets, housing starts and building permits issued were lower in April than for March. According to the Commerce Department, 1.172 million homes were started in April as compared to 1.203 million housing starts reported in March; April’s housing starts were 0.070 percent higher year over year. Analysts had expected a reading of 1,259 million starts, which are calculated on a seasonally-adjusted annual basis.

Builders started single-family homes at a seasonally- adjusted annual pace of 835,000 homes in April, which indicated that builders may be gaining confidence in building homes for sale as compared to rental units. Building permits were issued at a pace of 1,229 million on a seasonally-adjusted annual basis; this was lower than the March reading of 1.260 million permits issued.

 The apparent lag between strong builder sentiment and housing starts and permits could be due to ongoing concerns over increasing materials prices and shortages of buildable lots and labor needed to ramp up home construction.

Mortgage Rates, Weekly Jobless Claims Fall

Mortgage rates fell last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage averaged three basis points lower at 4.02 percent. Rates for a 15-year fixed rate mortgage averaged 3.27 percent, a drop of two basis points over the prior week. Mortgage rates for a 5/1 adjustable rate mortgage averaged 3.13 percent, which was one basis point lower than the prior week. Discount points were unchanged at an average of 0.50 percent for all three mortgage types reported.

New jobless claims were lower than expected last week, with 232,000 new claims filed as compared to 240,000 new claims expected and 236,000 claims reported the prior week. Low readings for new unemployment claims suggest strong jobs markets, but can be volatile and subject to adjustment.

Whats Ahead

This week’s scheduled economic reports include readings on new and existing home sales and consumer sentiment. Mortgage rates and new jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – May 15, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on May 15th, 2017

Last week’s economic reports included readings on inflation and core inflation, retail sales and consumer sentiment. Weekly reports on new jobless claims and mortgage rates were also released.

Inflation, Retail Sales Higher in April

April inflation grew by 0.20 percent as expected. Core inflation, which excludes volatile food and energy sectors, increased by 0.10 percent. Analysts expected a reading of 0.20 percent. The Federal Reserve monitors inflation readings as part of its research for monetary policy decisions. The Fed set a benchmark of 2.00 percent annual inflation as an indicator of solid economic recovery. Growing inflation could prompt the Fed to raise interest rates in June.

Retail sales grew in April from 0.10 percent in March to 0.40 percent, but fell short of an expected 0.50 percent increase. Retail sales not including the automotive sector rose by 0.30 percent in April, which was the same growth rate posted in March. Analysts expected a reading of 0.50 percent. Growing retail sales indicates that consumers are more confident about economic conditions.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. The average rate for a 30-year fixed rate mortgage was three basis points higher at 4.05 percent. 15-year fixed rate mortgages had an average rate of 3.29 percent and was two basis points higher than the prior week. The average rate for 5/1 adjustable rate mortgages rose one basis point to 3.14 percent. Discount points averaged 0.50 percent for all three types of mortgages reported.

New jobless claims fell to 236,000 last week as compared to an expected reading of 245,000 new claims and the prior week’s reading of 238,000 new claims. Jobless claims remained below the 300,000 benchmark for the 114th consecutive week; last week’s reading was the lowest in more than 28 months.

Consumer sentiment ended the week on a positive note with a May index reading of 97.7 as compared to an expected reading of 97.20 and April’s reading of 97.0.

Whats Ahead

Economic readings scheduled for this week includes reports on the National Association of Home Builders Housing Market Index, Commerce department readings on housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – May 8, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on May 8th, 2017

Last week’s economic news included readings on construction spending, the post-meeting statement by the Fed’s Open Market Committee and labor-related reports including ADP payrolls, Non-farm payrolls and the national unemployment rate. Weekly readings on new jobless claims and mortgage rates were also released.

Fed Rate Unchanged, Mortgage Rates Hold Steady

Federal Reserve policymakers did not change the target federal funds rate, which ranges from 0.75 to 1.00 percent. In its usual post-meeting statement, FOMC said that a weak first quarter was “transitory” and expected economic growth to continue going forward. Less consumer spending contributed to a sluggish first quarter, but analysts said that a rate hike was very likely at the FOMC meeting in June. The FOMC included its usual caveat concerning monetary policy in its statement; FOMC policies are not pre-determined, but are based on members’ ongoing review of news and economic developments.

Freddie Mac reported minor changes in its weekly survey of mortgage rates. 30-year fixed rate mortgage rates were one basis point lower at 4.02 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.27 percent; the average rate for a 5/1 adjustable rate mortgage rose one basis point to 3.13 percent. Discount points averaged 0.50 percent for all three mortgage types.

Construction, Labor Reports Reflect Economic Growth

Construction spending fell in March after an unusually high reading in February. The original growth rate for February construction spending was 0.80 percent, but was adjusted to 1.80 percent. A spurt of unseasonably warm weather was cited as pushing construction activity to unusual levels in February. Construction spending fell by -0.20 percent as compared to an expected reading of 0.50 percent, which was based on the original reading for February.

ADP Payrolls reported lower growth for private sector jobs in April with a reading of 177,000 new jobs as compared to 255,000 new jobs gained in March. The Federal Non-farm payrolls report, which covers public and private sector jobs, posted a gain of 211,000 jobs in April after reporting only 79,000 jobs added in March. The disparity in month to month readings indicates ongoing volatility in jobs growth, but the national unemployment rate dropped to 440 percent in April from 4.50 percent in March. Low unemployment rates can indicate economic growth with job seekers gaining employment.

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What’s Ahead For Mortgage Rates This Week – May 1, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on May 1st, 2017

Last week’s economic news included readings on Case-Shiller Home Prices Indices, new and pending home sales. Weekly readings on new jobless claims and average mortgage rates were also released. Case-Shiller reported that home prices rose by 0.20 percent from January to February with a year-over- year growth rate of 5.80 percent.

Western cities continued to post the fastest growth rates for home prices with Seattle, Washington topping annual home price growth rates at 12.20 percent; Portland, Oregon followed with a year-over-year home price growth rate of 9.70 percent. Dallas, Texas posted the third fastest growth rate for home prices with year-over-year growth in home prices at 8.80 percent. Dallas replaced Denver, Colorado for third place in the 20-City Home Price Index. 15 of 20 cities tracked in the Case-Shiller 20-City Home Price Index posted higher year-over-year gains in February than for January 2017.

New Home Sales Rise as Pending Home Sales Dip

New home sales rose to 621,000 sales in March; analysts expected a reading of 580,000 new homes sold on a seasonally adjusted annual basis based on January’s reading of 587,000 new home sales. Sales of new homes are important due to months of high demand for homes coupled with low inventories of homes for sale. Sales of new homes can indicate future readings on builder confidence and housing starts, but there are no definite connections between new home sales, builder confidence in housing market conditions and housing starts.

Pending home sales dipped in March with a month-to-month reading of -0.80 percent as compared to February’s seasonally adjusted annual reading of 5.50 percent. Pending sales are home sales for which sales contracts are signed but have not been closed. Pending home sales are an indicator of future completed sales and can be impacted by factors including fluctuating mortgage rates and regulatory influences on mortgage lending and mortgage approval requirements.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week. The average rate for a 30-year fixed rate mortgage was six basis points higher at 4.03 percent. The average rate for a 15-year fixed rate mortgage was four basis points higher at 3.27 percent. Mortgage rates for a 5/1 adjustable rate mortgage averaged 3.12 percent which was two basis points higher than for the previous week. Discount points averaged 0.50 percent for a 30-year fixed rate mortgage and averaged 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages

New jobless claims rose to 257,000 last week as compared to expectations of 245,000 new claims filed and the prior week’s reading of 243,000. Analysts said that the spike appeared to be localized in New York State and would likely resolve soon.

Whats Ahead

This week’s economic readings include ADP and Non-Farm Payrolls, national unemployment rate and readings on inflation. The Federal Open Market Committee of the Fed will issue its customary post-meeting announcement on Wednesday; this announcement is expected to reveal the Fed’s next move on interest rates. Weekly readings on new jobless claims and mortgage rates will also be released.

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What’s Ahead For Mortgage Rates This Week – April 24, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on April 24th, 2017

Last week’s economic reports included NAHB Housing Market Index, Commerce Department readings on housing starts and building permits issued. The National Association of Realtors® released data on existing home sales; Freddie Mac released average mortgage rates and new jobless claims were also released.

Builder Sentiment Dips in April, but Remains Strong

The National Association of Home Builders reported that home builder sentiment dipped three points in April to an index reading of 78. Any reading over 50 indicates that more builders are positive about housing market conditions than not. Builders continued to cite concerns including shortages of labor and buildable lots and increasing materials costs.

Builder confidence in housing market conditions do not always reflect building activity. March housing starts were lower at 1.215 million starts on a year-over-year basis. February’s reading was 1.303 million starts; the expected reading for April was 1.238 million starts. Readings for housing starts include single family homes of one to four units and multifamily complexes with five or more units. Single-family housing starts were 6.20 percent lower than in February at a seasonally-adjusted annual rate of 821,000 starts.

While housing starts were lower in March, more building permits were issued in March than in February. 1,260 million permits were issued in March on a seasonally-adjusted annual basis as compared to February’s reading of 1.216 million building permits issued.

Mortgage Rates Fall, Existing Home Sales Up

Mortgage rates fell below three percent according to Freddie Mac. The average rate for a 30-year fixed rate mortgage dropped from 4.08 percent to 3.97 percent; the average rate for a 15-year fixed rate mortgage fell by nine basis point from 3.34 percent to 3.23 percent. The average rate for a 5/1 adjustable rate mortgage was eight basis points lower at 3.10 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for a 5/1 adjustable rate mortgage. Lower mortgage rates are good news for home buyers challenged by rapidly rising home prices based on high demand and low supplies of homes for sale.

Home buyers persisted in March despite higher home prices. Sales of pre-owned homes hit a 10 year high in March as 5.71 million pre-owned homes were sold on a seasonally-adjusted annual basis. As compared to February’s reading of 5.48 million pre-owned homes sold, analysts expected a reading of 5.65 million sales of pre-owned homes in March.

New Jobless Claims Rise

First-time jobless claims were higher last week with a reading of 244,000 new claims as compared to the prior week’s reading of 234,000 new jobless claims. Week-to-week readings for new jobless claims tend to be volatile, but last week’s reading remained well below the benchmark of 300,000 new claims filed.

Whats Ahead

This week’s economic news includes readings on new and pending home sales, Case-Shiller Home Price Index reports, along with weekly reports on average mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – April 17, 2017

Posted in Mortgage Rates by Michigan Real Estate Expert on April 17th, 2017

Last week’s economic releases included readings on inflation, core inflation, new jobless claims, and mortgage rates. Consumer sentiment for April was also released.

Inflation Rate Dips in April

Consumer Price Index readings for April indicated that inflation decreased from 0.10 percent growth in March to a negative reading of -0.30 percent reading in April. The Core Consumer Price Index, which does not include volatile food and energy readings, also dipped in April to -0.10 percent from the March reading of +0.20 percent. While negative readings for month=to-month inflation suggests sluggish economic conditions, month-to-month readings can be volatile

 It’s possible that sluggish inflation readings could cause the Fed to postpone further interest rate increases. Lenders typically raise consumer interest rates when the Fed raises its target federal funds rate.

Mortgage Rates, New Jobless Claims

Freddie Mac reported lower average mortgage rates last week. Rates for a 30-year fixed rate mortgage averaged 4.08 percent a reading two basis points lower than for the previous week. The average rate for a 15-year fixed rate mortgage was two basis points lower at 3.34 percent; rates for a 5/1 adjustable rate mortgage dropped by one basis point to an average of 3.18 percent Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Last week’s mortgage rates were the lowest seen so far in 2017.

Fewer new jobless claims were filed last week with 234,000 new claims filed as compared expectations of 245,000 new claims filed and the previous week’s reading of 235, new claims filed.

Consumer sentiment rose in April to an index reading of 98.0. Analysts expected a reading of 96.0 based on the March reading of 96.9. The University of Michigan said that most consumers are upbeat about current economic conditions.

Whats Ahead

This week’s scheduled economic news includes the NAHB Housing Market Index, Existing Home Sales, Commerce Department readings on housing starts and building permits issued. Weekly readings for average mortgage rates and new jobless claims will also be released.

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