We have lots of home sales data, Gross Domestic Product (GDP) and durable goods orders to go over. Let’s supercharge this sleepy Monday.
Existing Home Sales: Existing home sales came in at a seasonally adjusted annualized rate of 5.490 million in December. This is down 2.8%. However, November received quite a boost in revision, up 5.650 million. Sales are up just 0.7% on the year. Supply is the lowest it’s been since 1999. There are just 1.650 million existing homes on the market equating to 3.6 months’ worth of supply. The median price is down 0.9% at $232,000, which is still up 4.0% on the year.
MBA Mortgage Applications: Mortgage applications were up 4.0% overall. This was mostly driven by purchase applications that were up 6.0%. Refinance applications were up 0.2% despite the average 30-year mortgage rate being eight basis points higher at 4.35%.
FHFA House Price Index: Home prices increased 0.5% in November and are up 6.1% on the year. The Pacific continues to lead the way with a 7.7% price gain. The Mid-Atlantic is the caboose on this train, but it’s still growing at a healthy 4.7%. It’s worth noting that the Case-Shiller reports show national price appreciation around 5%.
International Trade in Goods: The nation’s trade deficit was down $300 million at $65 billion. Exports rose 3.0% in December. Capital goods exports were up on the wings of aircraft orders that flew 7.3% higher. There were also gains in exports of industrial supplies. Imports were up 1.8%. Car imports were up 5.4% to $30.9 billion and capital goods imports were also up 2.0%. Industrial supply and food imports were up 2.2 and 1.3%, respectively.
Jobless Claims: Initial claims were up 22,000 to 259,000. However, the four-week average was down 2,000 to 245,500. Continuing claims were up 41,000 to 2.100 million. The four-week moving average was down to 2.092 million, which was down 1,250.
New Home Sales: New home sales were down 10.4% in December to a seasonally adjusted annualized rate of 536,000. November and October were revised upward a combined 14,000. The year-on-year sales rate is down 0.4%. The good news is that supply is 10.2% higher than it was a year ago. Supply in the market is up to 5.8 months. The average price of a new home is up 4.3% to $322,500. That’s a gain of 7.9% on the year.
Durable Goods Orders: New orders were down 0.4% in December, but still up 1.6% from last year. This is the result of a 64% downturn in the number of defense aircraft orders. When transportation is excluded, orders are up 0.5% and 3.5% on the year. Core capital goods orders were up 0.8% and 2.8% on the year. There’s a 0.6% drop in unfilled orders. This isn’t good because it means less work to do, equating to less employment opportunities.
Gross Domestic Product (GDP): GDP for the fourth quarter came in slightly below expectation with the economy growing 1.9%. Economists have been hoping for 2.2% growth. Inventories added 1 percentage point in the quarter. However, final demand for those inventories was up only 0.9%. Personal consumption expenditures are up 2.5%. However, they were spending on durable goods. This was down on the quarter. Residential investment was up 10.2% and business investment rose 2.4%. Net exports were down 1.7%, but that’s partially because of atypically strong third-quarter soybean exports. Prices were up 2.1%.
Consumer Sentiment: In the final reading for January, consumer sentiment came in at 98.5, up 0.4 points from the midmonth reading. Republican optimism is offsetting Democrats’ reservations. Inflation expectations are up 0.4% for the one-year outlook and 0.3% for the five-year outlook, both at 2.6%. There was a 0.6-point decline to 111.3 in the current conditions component.
Fixed-rate mortgage rates rose quite a bit this week. If you’re in the market for a mortgage, they’re still relatively low and that’s a good time to lock your rate.
Thirty-year fixed-rate mortgages (FRMs) averaged 4.19% with an average 0.4 point increase for the week ending Jan. 26, 2017, up from last week when they averaged 4.09%. A year ago at this time, 30-year FRMs averaged 3.79%.
Fifteen-year FRMs this week averaged 3.40% with an average 0.4 point increase, up from last week when they averaged 3.34%. A year ago at this time, 15-year FRMs averaged 3.07%.
Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.20% this week with an average 0.4 point decrease, down from last week when they averaged 3.21%. A year ago, 5-year ARMs averaged 2.90%.
The Dow Jones industrial average eclipsed 20,000 points for the first time in history last week. Traders are still very optimistic about President Donald Trump’s plans for the economy and earnings reports have been strong.
The Dow was down 7.13 points Friday to finish the week at 20,093.78, up 1.34% from last Friday’s close. The S&P 500 finished at 2,294.69, up 1.03% for the week, but down 1.99 points on the day. The NASDAQ was up 1.90% at Friday’s close, gaining 5.61 points on the day to finish at 5,660.78
The Week Ahead
Monday, January 30
Personal Income and Outlays (8:30 a.m. ET) – This measures all possible income sources as well as public expenditures.
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.
Tuesday, January 31
S&P Case-Shiller HPI (9:00 a.m. ET) – 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 Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.
Wednesday, February 1
MBA Mortgage Applications (7:00 a.m. ET) – The Mortgage Applications Index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
ISM Manufacturing Index (10:00 a.m.) – This index measures the general direction of manufacturing within the U.S. The qualitative survey of purchasing managers looks at production, new orders, order backlogs, inventories and supplier deliveries, among other factors.
Thursday, February 2
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, February 3
Employment Situation (8:30 a.m. ET) – The employment situation report measures unemployment in the labor force as well as the sentiments of workers about the job market.
We get some fairly big reports this week sandwiched around a Federal Reserve short-term interest rate decision on Wednesday. Buckle up!
If this economic and mortgage news doesn’t bust you out of the Monday mood, we have plenty of home, money and lifestyle content to get the ball rolling. When all else fails, Monday cookies don’t hurt, either.
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