Last week’s economic reporting included readings on new and pending home sales, inflation, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.
New home sales increase in December
The Commerce Department reported new home sales rose to a seasonally-adjusted annual pace of 616,000 sales in December as compared to the expected pace of 615,000 new homes sales and November’s revised reading of 602,000 annual sales. December was the third consecutive month that the pace of new home sales rose, but new home sales remained well below the 1.04 million sales peak reported in August 2020.
Pending home sales rose by 2.5 percent in December, which outpaced expectations of a one percent decrease in pending sales and November’s seasonally-adjusted annual decrease of -2.6 percent in pending home sales. New home sales are 26.6 percent lower than they were one year ago.
Month-to-month inflation slows in December
The Commerce Department reported that month-to-month inflation rose by 0.1 percent in December, which matched November’s month-to-month reading. Core inflation rose by 0.1 percent in December to 0.3 percent and matched analyst expectations. Core inflation readings exclude volatile food and fuel sectors that comprise major expenses for many U.S. households.
Year-over-year inflation rose by 5.0 percent in December as compared to November’s pace of 5.5 percent. Core inflation rose 4.4 percent in December, which matched analyst expectations, but fell short of November’s year-over-year reading of 4.7 percent for core inflation.
Mortgage rates, initial jobless claims fall
Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by two basis points to 6.13 percent. The average rate for 15-year fixed-rate mortgages fell by 11 basis points to 5.17 percent.
First-time jobless claims fell to 186,000 filings as compared to the expected reading of 205,000 initial jobless claims and the previous week’s reading of 192,000 new jobless claims filed. Continuing jobless claims rose to 1.68 million ongoing claims as compared to the previous week’s reading of 1.66 million continuing jobless claims filed.
Consumer sentiment strengthens in January
The University of Michigan’s Consumer Sentiment Index rose to an index reading of 64.9 in January, which surpassed the expected reading of 64.6 and December’s final index reading of 64.6. Readings over 50 indicate that a majority of consumers surveyed have a positive outlook on the economy. Falling gasoline prices contributed to an improved consumer outlook, but grocery prices remained high.
What’s ahead
This week’s scheduled economic reporting includes readings on U.S. home prices, The Federal Reserve’s Federal Open Market Committee meeting, and Fed Chair Jerome Powell’s scheduled press conference. Labor-sector reports on job growth and the national unemployment rate will also be released.
There is a common misconception that someone who is self-employed will not have the tax records or income necessary to qualify for a mortgage; however, that is not necessarily the case. In reality, if you are self-employed, there are a lot of home loan options available to you. It is true that it might require some additional paperwork and planning, but as long as you have the necessary information, you should be able to qualify for a mortgage.