Market UpdateHeadline News

VA Loan Limits: VA loan limits are changing in certain counties around the nation. You can see if your county is affected here.

Existing Home Sales – Sales of existing homes dropped 6.1% in November to 4.93 million homes. This was lower than even the lowest estimates and broke a five-month streak in which 5 million homes were sold. All four regions across the U.S. saw monthly sales declines in the single digits. The median price fell in November by 1.1% to $205,300. The number of homes on the market did drop to 2.09 million from 2.24 million, putting market supply at 5.1 months.

Durable Goods Orders – Durable goods orders were down 0.7% in the month of November after a 0.3% rise in October. The market had expected a 3.1% increase in orders. The only industry that experienced gains this month was machinery. Electrical equipment orders remained the same. Declines included primary and fabricated metals. Transportation fell 1.2% on the month. A significant drop in defense aircraft orders couldn’t be made up with gains in motor vehicles and nondefense aircraft orders. Despite the drop, new orders are up 0.3% over this time last year.

Gross Domestic Product (GDP) – GDP for the third quarter was revised up to a 5.0% gain. This represents the largest rate of growth since third quarter 2003. The new revisions are based upon strong improvements in the health care, recreation, financial services and software sectors.

Consumer Sentiment – Consumer sentiment barely changed in the last two weeks, ending at 93.6 compared to the midmonth rating of 93.8. Consumer opinions on current conditions fell nine tenths of a point to 104.8. The expectations component is up three tenths of a point from midmonth readings. Low gasoline prices are driving down inflation expectations.

Personal Income and Outlays – Incomes grew 0.4% in November, with wages and salaries growing by 0.5%. The price index for personal consumption items fell by 0.2% because of lower energy costs. Durables were up 1.6% while nondurables were flat. Services were up 0.6%.

New Home Sales – New home sales were down 1.6% in November for an annual sales rate of 438,000. This was 2,000 below the lowest expectations for the month. This occurred despite the fact that the median price was down 3.2% to $280,000. Supply of new homes in the market is 5.8 months.

MBA Purchase Applications – Purchase and refinance applications were both up 1.0% last week as interest rates remained low.

Jobless Claims – Initial claims fell last week by 9,000 to 280,000. This helped the four-week average sneak 8,500 lower to 290,250. Unfortunately, continuing claims rose 25,000 in the week of December 13 to 2.403 million. This forced the four-week average up 20,000 to 2,418,000.

Mortgage News

Mortgage rates were up slightly across the board this week.

30-year fixed-rate mortgages (FRMs) averaged 3.83% with an average 0.6 point for the week ending December 24, 2014, up from last week when they averaged 3.80%. A year ago at this time, 30-year FRMs averaged 4.48%.

15-year FRMs this week averaged 3.10% with an average 0.6 point, up from last week when they averaged 3.09%. A year ago at this time, 15-year FRMs averaged 3.52%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.01% this week with an average 0.5 point, up from last week when they averaged 2.95%. A year ago, 5-year ARMs averaged 3.00%.

1-year Treasury-indexed ARMs averaged 2.39% this week with an average 0.4 point, up from last week when they averaged 2.38%. At this time last year, 1-year ARMs averaged 2.56%.

Equity Markets

The Dow Jones Industrial Average was up 1.4% for the week, to close at 18,053.71 on Friday. The S&P 500 was up 0.9% on the week, closing at 2,088.77. The NASDAQ finished up 4,806.86, up 0.9% for the week.

The Week Ahead

Tuesday, December 30

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 headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months regarding business conditions, employment and income.

Wednesday, December 31

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

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.

Thursday, January 1, 2015

The markets are closed. Happy New Year!

Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.

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