Last week we got some huge economic reports like durable goods orders and GDP. There was also a little stock market craziness mixed in there.
FHFA House Price Index: Data for August showed that home prices were up 0.7% and 6.4% on the year. The national gain is the biggest since prices were up 0.8% in September of last year. Eight of the nine regions measured short monthly gains, with East North Central coming in highest, up 1.1%. West North Central was flat. The Pacific region has the highest yearly gains, up 7.9% while the Middle Atlantic is bringing up the rear at 3.3%.
S&P Corelogic Case-Shiller HPI: There was a little disagreement between the two home price indexes. Case-Shiller data had prices up just 0.2% in its 20-city survey area on a seasonally adjusted basis. Taking out seasonal differences, prices are up just 0.4% and 5.1% on the year. Monthly gains were posted in 14 of the 20 cities. San Francisco posted a 1.0% price gain with Seattle following at 0.8% in August. Meanwhile, Detroit, Atlanta, Chicago, and Las Vegas all had small price declines. Portland and Seattle lead annual gains at 11.8 and 11.4%, respectively. New York has the slowest price appreciation, up 1.8%.
Consumer Confidence: Consumer confidence was down almost 5 full points to 98.6 in its October reading. The present situation component was down over 7 points to 120.6. Current thoughts on business conditions aren’t helping that number. This leads to a downturn in the job outlook, which brings down buying plans for appliances, cars and homes. One positive is that fewer people are seeing jobs as hard to get. This is down 0.2% to 22.1%, as more Americans also see their incomes improving despite the overall expectations reading being down to 83.9.
MBA Mortgage Applications: Overall mortgage applications were down 4.1% despite that average rate on a 30-year fixed-rate mortgage was down 2 basis points to 3.71%. Refinance applications were down 2.0%, but the big drop was in purchase, where they fell 7.0%.
International Trade in Goods: The national goods gap was down $3.1 billion to $56.1 billion in September. Exports were up 0.9% with capital goods leading the way in a good sign for global business investment. Consumer goods exports were also up 4.4% and industrial supplies rose 2.3%. Also helping to decrease the deficit is that imports were down 1.1%. The only major sector where imports increased was in the vehicle category, which had an increase of 4.3%. In a bit of a surprise heading into the holiday season, imports of consumer goods were down 1.8%.
New Home Sales: New home sales were up 3.1% to a 593,000 annual rate. However, there were pretty big downward revisions to August in July. Sales are up 30% on the year. Home prices were also up 6.7% to $313,500. No doubt that part of the price uptick is due to a lack of inventory, which is at 4.8 months.
Durable Goods Orders: New orders were flat in September, down 0.1%. These are up 1.6% on the year. Taking out transportation orders, orders are up 0.2% and flat on the year. Defense aircraft orders were down 45%. Core capital goods orders are down 1.2% and 4.1% on the year. The good news is that there was a 0.3% rise in shipments of core capital goods with a boost in the August revision. The bad news is that future shipments and core categories were down 1.2%.
Jobless Claims: Initial jobless claims were down 3,000 to 258,000. The four-week average was up 1,000 to 253,000. Continuing claims were down 15,000 to 2.039 million. The four-week average was down 6,250 to come in at 2.051 million.
Pending Home Sales Index: Pending sales for existing homes are up 1.5% on the month. Leading the way are the South and West with 1.9% and 4.7% sales gains, respectively.
Gross Domestic Product (GDP): Third-quarter GDP estimates are coming in well ahead of projections, up 2.9%. Personal consumption expenditures were up 2.1% and adding 1.5% to GDP. Durable goods were really contributing to this, up 9.5%. There was a 2.3% rise in imports, but this was offset by a 10.0% rise in exports, boosted by foods. There was also an uptick in business investment and nonresidential fixed investment. Residential investment did fall 6.2% and dragged GDP down 0.2%. Prices were up 1.5%.
Consumer Sentiment: Consumer sentiment fell to a lower-than-expected 87.2 in the final reading for October. The expectations component was down to 76.8. There’s a lack of confidence in the jobs outlook. Current conditions are at 103.2, which is only a 1-point decrease.
Mortgage rates were down slightly last week, coming off a recent upward trend. It remains a great time to lock in your rate just in case the Federal Reserve makes a move with the short-term funds rate this week. If that happens, mortgage rates are likely to go up. Lock in today with Rocket Mortgage℠ by Quicken Loans.
30-year fixed-rate mortgages (FRMs) averaged 3.47% with an average 0.6 point for the week ending October 27, 2016, down 5 basis points from 3.52% last week. A year ago at this time, 30-year FRMs averaged 3.76%.
15-year FRMs this week averaged 2.78% with an average 0.5 point, down slightly from last week when they averaged 2.79%. A year ago at this time, 15-year FRMs averaged 2.98%.
5-year, Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.84% with an average 0.4 point, down from last week when they averaged 2.85%. A year ago, 5-year ARMs averaged 2.89%.
Investors really don’t like uncertainty, and elections are a great catalyst for that. The market was a little bit chaotic Friday following the announcement that the FBI is investigating some more of Hillary Clinton’s emails. The stock market traded lower following the announcement.
Because the Dow Jones Industrial Average had been up earlier in the day, it finished down just 8.49 points to 18,161.19. This is a five-day gain of 0.09%. The S&P 500 also held its ground, down 6.63 points to 2,126.41; down 0.69% for the week. The NASDAQ dropped 25.87 points to close at 5,190. This was a weekly loss of 1.28%.
The Week Ahead
Monday, October 31
Personal Income and Outlays (8:30 a.m. ET) – This measures all possible income sources as well as public expenditures.
Tuesday, November 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, November 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, November 3
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, November 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.
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.
There are a couple of big reports coming out next week, including the always important employment situation report. We have that to look forward to. If mortgage and economics don’t get you going on a Monday afternoon, we also have some spooky-good home, money and lifestyle content. That’s no trick. Happy Halloween!
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