According to December’s NAHB/Wells Fargo Housing Market Index, home builder confidence rose by four points to a reading of 58; this surpassed the consensus of 56 and November’s reading of 56.
November Housing Starts were released Wednesday and also exceeded expectations and the prior month’s reading. 1.09 million housing starts were reported for November against expectations of 963,000 and October’s reading of 889,000 housing starts.
Building permits issued in November came in at 1.01 million and fell short of October’s reading of 1.04 million permits issued. November’s reading exceeded expectations of 990,000 permits issued.
The week’s big news emerged after the conclusion of the Federal Reserve’s FOMC meeting. The committee announced that it would begin tapering the Fed’s $85 billion purchases of securities. The taper was modest; the Fed will reduce its rate of purchases to $75 billion monthly, with a split of $40 billion in Treasury securities and $35 billion in mortgage-backed securities.
Fed Chairman Ben Bernanke gave his final press conference as Fed chair. He noted that the FOMC was confident that the economy would continue to improve at a moderate rate and that the Fed would continue monitoring economic and financial developments to guide future adjustments in its monthly purchase of securities.
Mortgage rates were expected to rise after news of the Fed’s tapering of its quantitative easing program, as the program was intended to hold down long-term interest rates and mortgage rates.
Mortgage Rates, Jobless Claims Rise
Freddie Mac’s Primary Mortgage Market Survey confirmed expectations of higher mortgage rates. Average mortgage rates ticked upward by five basis points to 4.47 percent for a 30-year fixed rate mortgage; the average rate for a 15-year fixed rate mortgage rose by eight basis points to 3.51 percent.
Discount points for a 30-year mortgage were unchanged at 0.70 percent for a 30-year mortgage and dropped from 0.70 to 0.60 percent for a 15-year fixed rate mortgage. The average rate for a 5/1 adjustable rate mortgage rose from 2.94 percent last to 2.96 percent with discount points unchanged at 0.40 percent.
Weekly Jobless Claims came in at 379,000 and were higher than projections of 338,000 and the pri