With little important economic data to speak of last week, the market waited on the results of the first round of the French presidential election.
The major significance for the rest of the world is that Marine Le Pen wishes to have France leave the European Union while her opponent in the May 7 runoff, Emmanuel Macron, wishes to have France stay in the Euro Zone. If France were to join Britain in leaving, it could have major macroeconomic effects for all world economies. We’ll be keeping a close eye on this for sure.
Housing Market Index: Home builder confidence was down three points, but is still very strong at 68. Traffic growth continues at 52. Current and future sales are very strong, coming in at 74 and 75, respectively. Builders think the West will remain the hottest market for a while as it comes in at 77. Home builder confidence in the South and Midwest is near 70. The Northeastern market is still in contraction, under 50.
Housing Starts: Increased builder confidence in April didn’t translate to more starts in March. They fell 6.8% to a seasonally adjusted annualized rate of 1.215 million. Single-family homes accounted for 821,000 builds and multifamily homes added 394,000. That said, starts are up more than 10% for the year. Permits are also up 3.6% to 1.260 million. Multifamily starts are 14% to 437,000. Single-family permits were down 1.1% to 823,000.
Industrial Production: Production was up 0.5% in March. However, much of this had to do with an 8.6% increase in utility production. Manufacturing was down 0.4%. Part of the drop in manufacturing production may been due to Stella, a Category 3 storm that hit the Northeast. Vehicle manufacturing was also down, which didn’t help. Construction supplies were down 0.8%. Mining volume was also up only 0.1%. There was some strength in high-tech production and consumer goods. Capacity utilization was up 0.4% to 76.1%.
MBA Mortgage Applications: The average rate on a 30-year fixed-rate conforming mortgage fell 6 basis points to 4.22%. This was enough to push refinances up 0.2%, but not purchases which fell 3.0%. Overall applications were down 1.8%.
Jobless Claims: Initial claims were up 10,000 to 244,000. Despite this, the four-week average was down 4,250 to come in at 243,000. Continuing claims are down 49,000 to come in at 1.979 million. The four-week average was down 2,000, coming in at 2.024 million. Both continuing claims levels are 17-year lows.
Existing Home Sales: Existing home sales were up 4.4% to 5.710 million on a seasonally adjusted, annualized basis. They’ve risen 5.9% on the year. The sale price was up 3.6% to $236,400, up a total of 6.8% on the year. Supply was up 5.8% to 1.830 million. However, the homes are being sold as fast as they can be put on the market. Supply relative to sales was unchanged at 3.8 months. Houses also spent 11 less days on the market at 34.
Mortgage rates were below 4% for the first time since November. It’s a pretty good time to lock your rate if I do say so myself.
This week, 30-year fixed-rate mortgages (FRMs) averaged 3.97% with an average 0.5 point for the week ending April 20, 2017, down from last week when they averaged 4.08%. A year ago at this time, 30-year FRMs averaged 3.59%.
On the shorter side, 15-year FRMs this week averaged 3.23% with an average 0.5 point, down from last week when they averaged 3.34%. A year ago at this time, 15-year FRMs averaged 2.85%.
Finally, 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.10% this week with an average 0.4 point, down from last week when they averaged 3.18%. A year ago, 5-year ARMs averaged 2.81%.
Uncertainty over the French election and losses by IBM meant the market closed lower Friday, but it did post weekly gains.
The Dow Jones Industrial Average was up 0.46% for the week despite being down 30.95 points Friday to close at 20,547.76. The S&P 500 closed at 2,348.69, down 7.15 points for the day, but up 0.85% for the week. Finally, the NASDAQ was down 6.26 points to close at 5,910.52. It had the biggest weekly gains, up 1.82%.
The Week Ahead
Tuesday, April 25
FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
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.
New Home Sales (10:00 a.m. ET) – This measures the number of newly constructed homes with a committed sale during the month.
Wednesday, April 26
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.
Thursday, April 27
Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory hard 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.
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to report 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.
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.
Friday, April 28
Gross Domestic Product (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.
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 a ton of economic reports coming out this week with GDP anchoring things on Friday. We’ll have it all for you next Monday. If mortgages and economics really aren’t your thing, we have plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. The end of April brings with it May flowers, so it may be time to get a little dirt under the fingernails. Check out some gardening tips from an expert. Enjoy the warmer weather and have a great week!
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.