Housing Market Index: The housing market index slipped to 55, down from 57 in January. This still suggests confidence, although numbers are trending down. Traffic in new homes is a real source of weakness in this report, as it has dropped 5 points to 39. This represents the lowest reading since July. The expectations component remained unchanged at 60, while present sales fell a point to 61.
MBA Purchase Applications: Purchases were down 7.0% last week as average mortgage rates were up 9 basis points to 3.93%. Rising rates also caused the refinance index to fall 16.0%.
Housing Starts: Housing starts slipped to 1.065 million in January, a 2.0% decline. Permits were down to 1.053 million, a 6.7% drop. The weakness was in single-family starts, which declined 7.1% from last month. However, this is up 18.7% from last year at this time. Housing permits were down 0.7%. Multifamily starts were actually up 7.5%. Producer Price Index (PPI): Producer prices were down 0.8% in January, continuing a downward trend. Excluding food and energy, the decline was 0.1%. Falling energy prices were a major reason for the decline. Gasoline prices dropped 24.0%.
Industrial Production: Production was up 0.2%. The manufacturing sector was up 0.2% in January. There were gains in durable goods including primary metals, computer and electronics products. Among nondurables, there were gains in apparel and leather, chemicals and plastics. Capacity utilization was unchanged from December at 79.4%
Jobless Claims: Initial jobless claims were down 21,000 last week to 283,000. This almost canceled the 25,000-job increase of the prior week. The four-week average was down to 283,250, a 6,500-job improvement and the fourth straight decrease. Continuing claims were mixed, up by 58,000 to 2.425 million for the week of February 7. However, the four-week average was down 10,000 to 2.398 million.
Mortgage rates are mostly up this week.
30-year fixed-rate mortgages (FRMs) averaged 3.76% with an average 0.6 point for the week ending February 19, 2015, up from last week when they averaged 3.69%. A year ago at this time, 30-year FRMs averaged 4.33%.
15-year FRMs this week averaged 3.05% with an average 0.6 point, up from last week when they averaged 2.99%. A year ago at this time, 15-year FRMs averaged 3.35%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.97% this week with an average 0.5 point, unchanged from last week. A year ago, 5-year ARMs averaged 3.08%.
1-year Treasury-indexed ARMs averaged 2.45% this week with an average 0.4 point, up from last week when they averaged 2.42%. At this time last year, 1-year ARMs averaged 2.57%.
The Dow Jones Industrial Average closed up 154.67 points on Friday, closing at a record high of 18,140.44, up 0.7% on the week. The NASDAQ was up 31.27 points to 4,955.97, a week-over-week gain of about 1.3%. The S&P 500 was up 0.6% week over week after gaining 12.85 points Friday to finish at 2,110.30.
The Week Ahead
Monday, February 23
Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home re-sales) account for a larger share of the market than new homes and indicate housing market trends.
Tuesday, February 24
S&P Case-Shiller HPI – The S&P Case-Shiller home pricing index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.
Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months when considering business conditions, employment and income.
Wednesday, February 25
MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
New Home Sales (10:00 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month.
Thursday, February 26
Consumer Price Index (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.
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.
Durable Goods Orders (8:30 a.m. ET) – Durable goods orders are based on the new orders placed with domestic manufacturers for factory hard goods.
Friday, January 27
GDP (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.
Pending Home Sales Index (10:00 a.m. ET) – The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.
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.
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