- Consumer Price Index – Headline CPI inflation in November posted a flat reading after dipping 0.1% in October. The CPI excluding food and energy firmed to 0.2%, following a rise of 0.1% the prior month.
- Housing Starts – Housing starts jumped 22.7% in November after rising 1.8% in October. The November starts annualized level of 1.091 million units topped expectations for 0.952 million units and was up to 29.6% on a year-ago basis.
- FOMC Meeting Announcement – The Fed announced a taper to start in January in measured steps – a $10 billion reduction split between Treasuries and MBSs and future moves still data dependent. The Fed left policy rates unchanged.
- Chairman Press Conference – QE is being reduced because of meeting objectives rather than due to costs versus benefits. It is unlikely that the Fed will have losses on QE purchases but it is possible that the Fed will not give remittance to the Treasury for a few years.
- Jobless Claims – The Labor Department stresses that during the holidays, the trend is what is most important – and the trend for initial claims is pointing to little change in the labor market. Initial claims in the December 14 week remained very elevated for a second week, at 379,000 for a 10,000 gain from the prior week and up 74,000 from the week before that.
- Existing Home Sales – Demand for existing homes is down as sales fell a sharp 4.3% in November for a fourth straight month of disappointment.
- Gross Domestic Product (GDP) – Real GDP growth unexpectedly revised up to 4.1% annualized, compared to the 3.6% second estimate and 2.5% in the second quarter.
- The CPI was flat in the month of November, below the forecast and the consensus. The downside surprise relative to our forecast reflected a larger decline in energy (-1.0%) than expected.
- The National Association of Home Builders (NAHB) index of U.S. home builder sentiment rose to 58 in December, a stronger reading than expected.
According to the Primary Mortgage Market Survey, average fixed rates rose slightly from the prior week following positive news for housing starts and building permits.
30-year fixed-rate mortgages (FRM) averaged 4.47% with an average 0.7 point for the week ending December 19, 2013, up from last week when it averaged 4.42%. A year ago at this time, the 30-year FRM averaged 3.37%.
15-year FRM this week averaged 3.51% with an average 0.6 point, up from last week when it averaged 3.43%. A year ago at this time, the 15-year FRM averaged 2.65%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96% 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 2.71%.
1-year Treasury-indexed ARM averaged 2.57% this week with an average 0.5 point, up from last week when it averaged 2.51%. At this time last year, the 1-year ARM averaged 2.52%.
The Dow Jones Industrial Average, S&P 500 and NASDAQ all closed higher, with the Dow and S&P both at record highs. The NASDAQ finished up 1%, and topped the 4,100 mark for the first time since September 2000.
The Week Ahead
Tuesday, December 24:
Consumer Sentiment (9:55 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
New Home Sales (10 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.
Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.