Consumer Sentiment Up in Midst of Holiday Season – Market Update

Quicken Loans Market Update - Zing Blog

Headline News from the Last Week

  • New Home Sales – New Home Sales fell 6.6% in September to a 354,000 million annual rate. The rate for August is revised sharply downward, to 379,000 from 421,000. Tight supply has been limiting sales all year though supply at the September sales rate improved to 6.4 months compared to 5.6 months in August.
  • GDP – Real GDP growth for the third quarter came in stronger than expected but not in a good way. Real GDP was revised up to 3.6% annualized, compared to the 2.8% advance estimate and 2.5% in the second quarter. The upward revision was largely due to a higher estimate for inventory growth. Small upward revisions were in nonresidential fixed structures and government purchases.
  • Consumer Sentiment – Consumer sentiment is building quickly this holiday season, at 82.5 for the early December reading compared to 75.1 for final November and 72.0 at mid-month November. The latest reading is the best since July.
  • Jobless Claims – Jobless claims decreased 23,000 to 298,000 last week.
  • Treasury yields climbed to their highest point since September thanks to quicker than expected job growth. The 10-year UST is down 13/32 in price to yield 2.83%.
  • U.S. household worth rose by $1.92 trillion from July through September.
  • The Federal Reserve doesn’t plan to taper the stimulus effort until next year due in large part to the strengthened job growth.
  • Regulators will vote Tuesday on the “Volcker Rule.” The rule is expected to bar most trading by banks for their own accounts and profits in a bid to protect the financial system and federal deposit insurance from future 2008-like meltdowns.
  • Zillow predicts easier credit access and lower homeownership in 2014. Home values are forecast to jump by 3% at the national level over the next year.

Mortgage Rates

According to the weekly Primary Mortgage Market Survey, rates jumped for the week.

30-year fixed-rate mortgage (FRM) averaged 4.46% with an average 0.5 point for the week ending December 5, 2013, up from last week when it averaged 4.29%. A year ago at this time, the 30-year FRM averaged 3.34%.

15-year FRM this week averaged 3.47% with an average 0.4 point, up from last week when it averaged 3.30%. A year ago at this time, the 15-year FRM averaged 2.67%.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99% this week with an average 0.4 point, up from last week when it averaged 2.94%. A year ago, the 5-year ARM averaged 2.69%.

1-year Treasury-indexed ARM averaged 2.59% this week with an average 0.4 point, down from last week when it averaged 2.60%. At this time last year, the 1-year ARM averaged 2.55%.

Equity Markets

The Dow Jones Industrial Average jumped nearly 200 points Friday due to a better-than expected November jobs report although it was unable to edge out wins for the week. Despite a good Friday for the S&P 500, it too finished down for the week.

The Week Ahead

Thursday, December 12:

  • Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market.
  • Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are by retail and food services stores. Data are collected from the Monthly Retail Trade Survey conducted by the U.S. Bureau of the Census.

Friday, December 13:

  • Producer Price Index (8:30 a.m. ET) – The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measure the average change over time in the prices received by domestic producers of goods and services.

Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.


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