I went and saw the new “Jurassic World” movie this weekend. If I learned nothing else, it’s that dinosaurs are good at causing destruction.
If I didn’t know any better, I would say that a Tyrannosaurus rex was wreaking havoc on Wall Street for quite a while now. The Dow Jones Industrial Average finally broke an eight-day losing streak Friday. Let’s jump into the rest of the economic data.
Housing Market Index
Home builders still feel confident in the housing market, although less so than they did in May. Overall market ratings have fallen two points in June. Current sales figures came in at a rating of 75, future sales in the next six months were at 76 and prospective buyers walking through came in at 50. Each rating is down one point from the previous month.
Of particular concern is the traffic number, which is the lowest since November.
The West continues to be the region builders are most focused on and leads the way in terms of confidence, followed by the South and Midwest. The Northeast is still bringing up the rear, but it’s been steadily improving.
This report was mixed in May. Starts were great, but permits for future construction were a little lacking.
Housing starts were up 5% in May, coming in well above estimates at 1.35 million on a seasonally-adjusted annualized basis. This included a 3.9% increase in single-family home construction at 936,000. Starts in the multi-family category were up 7.5% to come in at 414,000.
Meanwhile, permits fell 4.6% in May to 1.30 million. Single-family home permits were down 2.2% to 844,000, while multi-family permits were down 8.8% to 457,000.
Completions of new homes were up 1.9% to 1.29 million with the gain concentrated in the single-family category, which was up 11.0% to 890,000. This gain offset a 13.8% downturn in the multi-family category, to come in at 401,000 finished projects.
MBA Mortgage Applications
The average rate for a 30-year fixed mortgage was flat at 4.83% for the week ending June 15, according to the Mortgage Bankers Association.
Consumers took advantage of the certainty as applications were up 5.1% overall, with buyers contributing a 4% increase in purchase applications. Refinance applications were up 6% on the week.
Existing Home Sales
Existing home sales were down 0.4% on the month to come in at a seasonally-adjusted annualized rate of 5.43 million. This is down 3% on the year.
There’s speculation that prospective buyers may be bristling at the prices, which were up 2.7% on the month to a record high of $264,800. This is up 4.9% on the year. The decline in sales did help supply, which was up 2.8% to 1.85 million units. It’s still thin as supply relative to sales is only at 4.1 months.
In regional data, sales in the West and Midwest are down on the year along with the Northeast, which has an 11.7% yearly decline. Meanwhile, in the South, the nation’s largest housing region, sales are flat annually.
Initial claims were down 3,000 to 218,000. The four-week moving average was down 4,000 to settle at 221,000.
On the other hand, continuing claims were up 22,000 to come in at 1.723 million. However, the four-week average was down 4,000 to also come in at 1.723 million. For the first time in a while, claims reported normally in Puerto Rico and the Virgin Islands as well.
FHFA House Price Index
Home prices are up 6.4% on the year after rising 0.1% on the month of April. The mountain region was up 0.4% and is up 8.9% on the year. The Pacific region is up 0.1% and 8.3% on the year. The West South Central region brings up the rear at 4.6% yearly price appreciation.
Mortgage rates last week were either down or flat according to Freddie Mac. They’ve been going up so if you’re in the market, now could be a good time to lock your rate.
The rate on a 30-year fixed was down five basis points to 4.57% with 0.5 points in fees. It’s gone up from 3.90% at the same time last year.
In shorter terms, the 15-year fixed mortgage was down three basis points to 4.04% with 0.4 points. This is up from 3.17% last year.
Finally, the average rate on a 5-year treasury-indexed hybrid adjustable rate mortgage (ARM) was flat on the week at 3.83% with 0.3 points. This is up from 3.14% a year ago.
As mentioned above, the Dow broke an eight-day losing streak, it’s the longest since March 2017. Trade tensions are still ruling the roost.
The Dow was up 119.19 points to come in at 24,580.89, down 2.03% on the week. The S&P 500 finished at 2,754.88, up 5.12 points on the day and down 0.89% on the week. Finally, the Nasdaq was down 0.69% on the week after finishing at 7,692.82, down 20.14 points on the day.
The Week Ahead
Monday, June 25
New Home Sales (10:00 a.m. ET) – This measures the number of newly constructed homes with a committed sale during the month.
Tuesday, June 26
S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller home price 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, June 27
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.
Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory goods.
International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.
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.
Thursday, June 28
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, June 29
Personal Income and Outlays (8:30 a.m. ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.
Consumer Sentiment (10:00 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.
There’s quite a bit going on this week. We’ll have it all covered in Market Update.
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