Market Update - Quicken Loans Zing Blog

Lots of important data hit last week ahead of the election, including information on wage and job growth. The Federal Reserve also chose to leave rates where they are for now so if you’re looking to get a mortgage, you’ve got a reprieve for another month.

Headline News

Personal Income and Outlays: Personal incomes were up 0.3% in September. Consumer spending also rose 0.5% as vehicle sales went up. On the inflation side of the ledger, prices were up 0.2% and 0.1% in core categories for the month. These measures are up 1.2% and 1.7%, respectively, for the year. The savings rate among Americans was 0.1% lower.

ISM Manufacturing Index: The manufacturing sector showed slight improvement, coming in at 51.9 in October from 51.6 in the prior month’s index measurement. However, new orders are down quite a bit at 52.1 compared to 55.1 in September. Backlog orders are also at 45.5, meaning they continue to shrink. Manufacturers aren’t likely to hire if there’s no backlog to cut down. New export orders did rise half a point to 52.5. Production was up 1.6 points at 54.6, so things are speeding up there. Employment also rose quite a bit, settling at 52.9 after having been at 49.7 in September. This is a good indication of employment growth.

MBA Mortgage Applications: Purchase applications were down 0.4% and refinance apps fell 2.0% so the overall implications were down 1.2% last week. Part of this probably had to do with rate effects ahead of the Federal Reserve announcement as the average rate on a 30-year-fixed mortgage was up 4 basis points to 3.75%.

Jobless Claims: Despite being up 7,000 last week, initial claims are holding near record lows at 265,000. The four-week average of new claims was up 4,750 at 257,750. Continuing claims fell to 2.026 million, down 14,000 from the previous week. The four-week average fell by 9,000 to 2.043 million.

Employment Situation: Nonfarm payrolls were up 161,000 in October. While this headline number missed consensus expectations for a 178,000 job increase, other really good indicators helped offset this. To begin with, numbers for August and September were revised up by 44,000 combined. The unemployment rate also ticked down 0.1% to 4.9%. The average workweek held steady at 34 hours, 24 minutes. The labor force participation did decrease one-tenth to 62.8%. The big news for the month was that wages were up 0.4% in October and are at a 2.8% increase on the year. Private payrolls added 142,000 jobs while government payrolls kicked in 19,000. There were 11,000 jobs added in construction while professional services and temporary services both had gains as well. Manufacturing employment data diverged with the ISM survey, showing a decline.

International Trade: The trade deficit decreased $4.3 billion to $36.4 billion in September. Imports were down 1.1% as there was a decrease in demand for consumer and capital goods. Exports were up 0.6% as everywhere else in the world was looking for capital goods.

Mortgage News

A jump in personal consumption expenditures closely tracked by the Fed caused investors to sell the 10-year treasury bond, which drove up its yield. Because this bond is closely correlated with mortgage rates, they went up.

That said, as I mentioned above, the Fed chose not to raise short-term interest rates that tend to have a big effect on mortgage rates. This means that at least until the Fed meets again in December, you still have a chance to lock your really low rates.

30-year fixed-rate mortgages (FRMs) averaged 3.54% with an average 0.5 point for the week ending November 3, 2016, up from last week when they averaged 3.47%. A year ago at this time, 30-year FRMs averaged 3.87%.

15-year FRMs this week averaged 2.84% with an average 0.5 point, up from last week when they averaged 2.78%. A year ago at this time, 15-year FRMs averaged 3.09%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.87% with an average 0.4 point, up from last week when they averaged 2.84%. A year ago, 5-year ARMs averaged 2.96%.

Stock Market

The losing streak on the S&P 500 extended to nine trading days Friday. This is the longest such streak in almost 36 years. That being said, markets were down across the board Friday as investors prepped for the election.

The Dow Jones Industrial Average was down 42.39 points to finish at 17,888.28, down 1.50% for the week. The S&P 500 was down just slightly, falling 3.48 points to close at 2,085.18, dropping 1.94% for the week. The NASDAQ ended the day at 5,046.37, losing 12.04 points on the day and 2.77% since the previous Friday.

The Week Ahead

Tuesday, November 8

Don’t forget to vote! We’ve got plenty of housing data to share after you get back from the polls tomorrow.

Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month comparing what people think their homes are worth through appraisals. Similar opinions of value often make for smoother purchase and refinance transactions.

Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, both on the national and regional level. Homeowners can gain a perception of whether values are increasing or decreasing, and get a better idea of where they stand in terms of equity.

Wednesday, November 9

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

Thursday, November 10

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 11

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.

Happy Veterans Day to all that have served our country! Thank you very much for your service!

There’s not much on the economic calendar, but we may see the market react depending on who wins the election. That could be interesting to watch. If all of this numbers stuff doesn’t appeal to you, we have all sorts of home, money and lifestyle content to get your week off to the right start. Subscribe to the Zing Blog below!

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