FHFA House Price Index: The Federal Housing Finance Agency reported that home prices were up 0.2% in June, below forecasted estimates. The year-over-year increase fell one tenth of a point to 5.6%. The regional breakdown showed gains in seven of nine regions. New England had a 2.5% monthly gain.
S&P Case-Shiller HPI: The S&P Case-Shiller Index showed that home prices fell 0.1% across the 20-city survey on a seasonally adjusted basis. Despite this, home prices were up 1.0% overall in the 20 cities. Year-over-year growth slowed to 5.0% in June. Also a negative were price drops in 11 of the 20 cities. Chicago was down 1.7% for the biggest loss of the month. Portland, Oregon was up 0.5% in June. Meanwhile, Denver’s prices have risen 10.2% since last year. Chicago is bringing up the growth rear having gained only 1.3% since last year.
New Home Sales: Home sales were up 5.4% to an annual pace of 507,000. This is a 26% increase over this time last year. Supply slipped to 5.2 months from 5.3 months in shield. The Northeast led the way in sales gains regionally with a year-on-year gain of 39%. Sales were up 30% year on year in the West. Meanwhile, the Midwest is flat for the year. The median price was up 3.0% for the month to 285,900. This is a gain of 2% year on year.
Consumer Confidence: Consumer confidence surged 10.4 points this month. There was a drop of 6.5% in the number of people who think jobs are hard to find. The present situation component is up to 115.1 points, in an 11.1 point increase from August. Expectations are also up over 10 points to 92.5. On the negative side, fewer people are planning to buy a vehicle, and there are fewer plans to buy a house. Inflation expectations are down 0.2 points to 4.9%.
MBA Mortgage Applications: Mortgage applications were up 0.2% last week on the strength of an increase in purchases. Purchase applications were up 2.0% while refinances fell 1.0%. The average rate for a 30-year fixed mortgage fell three basis points to 4.08%.
Durable Goods Orders: Durable goods orders were up 2.0% this month. Orders were up 0.6%, excluding transportation. Orders for vehicles at 4.0% in shipments of cars are up 0.9%. Commercial aircraft are down 6.0% after June’s 70% uptick. Total shipments were up 1.0% in July, while unfilled orders were up 0.2%. Unfortunately, new orders are down 19.6% from last year.
GDP: Second-quarter GDP estimates project the annual rate of growth in the American economy to be 3.7%. This is 0.5% above estimates. Consumer demand and personal consumption expenditures were up 3.1% with an 8.2% increase in spending on durable goods led by an increase in orders for motor vehicles. Residential investment was also up 7.8%. Nonresident investment was up 3.2%. Inventories and net exports both showed improvement. Final demand for goods grew by 3.5%. Prices are also up 2.1% quarter to quarter. Overall, it’s a marked improvement from the first quarter when the annual growth rate was projected at just 0.6%.
Jobless Claims: Initial claims fell by 6,000 this week to 271,000. The four-week average was up 1,000, coming in at 272,500. In contrast, continuing claims were up 13,000 at 2.269 million, and the four-week average was down 1,000 to 2.265 million.
Pending Home Sales Index: Pending home sales were up 0.5% for the month of July to an index reading of 110.9. There was a 4.0% gain in pending sales in the Northeast, the country’s smallest region. There was a 1.4% dip in the West. Meanwhile, sales were up 0.6% in the South. The Midwest was flat.
Personal Income and Outlays: Personal incomes are up 0.4% this month and consumer spending is up 0.3%. Pressure on prices still wasn’t very high as prices in the core categories matched overall inflation for the month with a 0.1% increase. Overall, inflation is up 0.3% on the year in the core categories. Inflation is up 1.2% on the year overall. The increase in incomes was parlayed from a 0.5% increase in wages and salaries. There was a 1.1% gain in durable because of increased vehicle sales.
Consumer Sentiment: Consumer sentiment was down a point this month to 91.9. The current conditions component was down two points to 105.1. The current conditions reading is down 0.4 points to 83.4. Inflation expectations remain the same at 2.8% for one year and 2.7% for the five-year outlook.
Volatility in the Chinese and U.S. stock markets last week pushed rates down.
30-year fixed-rate mortgages (FRMs) averaged 3.84% with an average 0.6 point for the week ending August 27, 2015, down from last week when they averaged 3.93%. A year ago at this time, 30-year FRMs averaged 4.10%.
15-year FRMs this week averaged 3.06% with an average 0.6 point, down from last week when they averaged 3.15%. A year ago at this time, 15-year FRMs averaged 3.25%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.90% this week with an average 0.4 point, down from last week when they averaged 2.94%. A year ago, 5-year ARMs averaged 2.97%.
1-year Treasury-indexed ARMs averaged 2.62% this week with an average 0.3 point, unchanged from last week. At this time last year, 1-year ARM averaged 2.39%.
Market results were mixed on Friday, ending a week characterized by gains following the downturn of last week. Oil prices are rebounding and economic data was good.
The Dow Jones Industrial Average finished Friday down 11.76 points, closing at 16,643.01. This is only 1.11% rebound from last Friday. Meanwhile, the S&P 500 closed at 1,988.87. The market was up 1.21 points on the day and closed up 0.91% for the week. The NASDAQ ended the week at 4,828.33 points Friday, following a 15.62 point gain that helped the market experience a 2.60% bounce back from last week.
The Week Ahead
Tuesday, September 1
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.
Wednesday, September 2
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, September 3
International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings.
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. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, September 4
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.
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