Market Update - Quicken Loans Zing Blog

Headline News

FHFA House Price Index: Home prices were up 0.5% in November and are up 5.9% year over year. The Mountain states lead the way with a 10.0% year-over-year gain, followed by the Pacific at 8.6% and the South Atlantic at 7.0%. The Middle Atlantic is the weakest of the nine housing regions, showing a year-over-year gain of just 2.6%.

S&P Case-Shiller HPI: Home prices were up 0.9% in November across the 20-city S&P index on a seasonally adjusted basis. Prices were up 0.1% overall and 5.8% on the year. All 20 cities posted gains and half were up 1% or more. Portland is up 11.1% on the year, followed by San Francisco at 11.0% and Denver at 10.9%. Washington DC and Chicago bring up the rear with gains of 2.1% and 2.0%, respectively.

Consumer Confidence: Consumer confidence was up 1.8 points to 98.1 in January. Only 23.4% of those surveyed considered jobs hard to get. That’s down more than 1% from December. However, most people think jobs are plentiful, down 1.4% to 22.8%. This left the present situation component unchanged at 116.4. Meanwhile, future expectations are up almost 3 points to 85.9. More than 7% of people think their income prospects are good versus those who feel they could be better. And more people also see jobs opening up. Plans to buy cars, homes and appliances have gone up.

 

MBA Mortgage Applications: Mortgage applications were up 8.8% last week with purchases rising 5.0% and refinances up 11.0%. The average rate for a 30-year conforming loan was down four basis points to 4.02%.

New Home Sales: New home sales were up 53,000 in December to a much better than expected 544,000 sales on a seasonally adjusted annual basis. The boost may have been helped by the fact that the median sales price was down 2.7% to 288,900. Low supply remains a factor. A total of 6,000 new homes were added to the market in December, but it couldn’t keep pace with sales. Supply was down to 5.2 months from 5.6 months. There was a 32% rise in sales in the Midwest, while the West and Northeast were both up 21% for the month. The South had a minimal gain. Looking back on 2015, sales rose to 501,000 compared to 437,000 last year.

Durable Goods Orders: New orders for durable goods were down 5.1% in December. This fell well short of expectations for a 0.2% gain. Orders excluding transportation were down 1.2%. Core capital goods were down 4.3%. These exclude defense material and aircraft. Shipments of core capital goods are down 0.2%. Turning to the categories, aircraft orders were down 29% and motor vehicle sales were down 0.4%. Machinery and computers were down 5.6% and 8.7%, respectively. New orders are down 0.6% on the year.

Jobless Claims: Initial claims fell 16,000 to 278,000 last week. The four-week average is 2,250 lower to 283,000. Continuing claims were up 49,000 to come in at 2.268 million. The four-week average is up 15,000 to reaching 2.246 million.

Pending Home Sales Index: Pending home sales were up 0.1% coming in at 106.8 made in December. This follows a 1.1% decline in November in the Northeast, up 6.1%. However, this is the smallest housing region and the other three regions showed declines. The biggest downturn is 2.1% in the West.

GDP: GDP rose only 0.7% on a seasonally adjusted annual basis. Services spending was up 0.9% while spending on goods was at 0.5%. Net exports had a bad quarter, pulling down GDP by 0.5%. Nonresidential investment drops the number by 0.2%. Inventory investment was the final tug on GDP, pulling it down 0.5%. Prices are up 0.8%.

Consumer Sentiment: Consumer sentiment was down 1.3 points to 92.0. Current conditions are down 1.7 points to 106.4. Meanwhile, expectations are unchanged at 82.7. Inflation expectations are pretty stable at this point and one-year inflation expectations are down 0.1% to 2.5% as five-year expectations are up 0.1% to 2.7%.

Mortgage News

Mortgage rates were down across the board again last week.

30-year fixed-rate mortgages (FRMs) averaged 3.79% with an average 0.6 point for the week ending January 28, 2016, down from last week when they averaged 3.81%. A year ago at this time, 30-year FRMs averaged 3.66%.

15-year FRMs this week averaged 3.07% with an average 0.5 point, down from 3.10% last week. A year ago at this time, 15-year FRMs averaged 2.98%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.90% this week with an average 0.5 point, down from last week when they averaged 2.91%. A year ago, 5-year ARMs averaged 2.86%.

Stock Market

Encouraged by the fact the Bank of Japan is adopting a negative interest rate policy for the first time in its history, U.S. stocks were up more than 2% on Friday, January 29. Good earnings reports also helped things. Despite this, the major averages have their worst opening month in seven years or more.

The Dow Jones industrial average finished up 396.66 points to close at 16,466.30 on Friday, up 2.32% for the week. The S&P 500 was up 1.75% for the week after closing up 46.88 points Friday to 1,940.24. The NASDAQ was up 107.28 points to finish 0.50% higher for the week at 4,613.95

The Week Ahead

Monday, February 1

Personal Income and Outlays (8:30 a.m. ET) – This measures all possible income sources as well as expenditures of the public.

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, February 3

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, February 4

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, February 5

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.

That’s a pretty loaded week of economic news. We’ve got so much more than mortgages and economic reports to share with you. Subscribe to the Zing Blog below for tips and tricks for your home, money and life.

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