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Market Update - Quicken Loans Zing Blog

Uneventful. I spent a wonderful weekend in Michigan’s Northern Lower Peninsula at a family cottage with several of my relatives. Hours were spent hanging by the lake and eating my aunt’s fantastic cooking. It was nice to just hang out and not do much of anything.

The Federal Reserve had its annual retreat in Jackson Hole, Wyoming. Although Federal Reserve Chairwoman Janet Yellen and her European Central Bank counterpart Mario Draghi both delivered remarks, neither said anything to move the market in the slightest and it was very uneventful.

There was some other market news, though. Let’s jump right in.

Headline News

FHFA House Price Index: In June, home prices were up 0.1% and have risen 6.5% on the year. This missed consensus expectations for a 0.5% monthly increase. While helping with the affordability problem for prospective home buyers, it does limit equity growth for existing households. Year-over-year gains in this index are still a full percentage point above those in the data being collected by Case-Shiller.

MBA Mortgage Applications: Mortgage applications were down 0.5% last week as a 0.3% increase in refinance applications wasn’t enough to overcome a 2.0% dip in purchase applications. The average rate on a 30-year fixed mortgage was flat at 4.12%.

New Home Sales: New home sales were down 10.3% in July to a seasonally adjusted annualized rate of 571,000. The good news is there were upward revisions for both May and June. This particular metric often has wide swings and the three-month average is still over 600,000 homes sold. Supply added to the market totaled 4,000 to 276,000. Combining this with the decrease in sales, there are now 5.8 months’ worth of supply in the market vs. 5.2 months in June. Six months’ supply shows a market in balance. Prices of new homes are still going up, rising 0.7% in July to a median price of $313,700.

Jobless Claims: Initial jobless claims were up 2,000 to come in at 234,000. The four-week moving average was down 2,750 to 237,750. On the continuing claims side, claims were unchanged at 1.954 million. The four-week average was down 2,750 at 1.958 million.

Existing Home Sales: Existing home sales came in at 5.440 million on a seasonally adjusted annual basis for July. This was down 1.3% from June’s numbers. Despite this, existing home sales are still up 2.1% on the year. Single-family homes saw their sales drop 0.8% to 4.840 million. Multifamily homes were down 4.8% to 600,000. That being said, multifamily home sales are still outperforming single-family with a yearly gain of 5.3% vs. 1.7%. Median existing home prices did fall 1.9% to 258,300. However, this is still up 6.2% on the year. Supply in the market relative to sales remains unchanged at 4.2 months.

Durable Goods Orders: New orders of durable goods fell 6.8% in July and are up 4.2% on the year. Much of the July decline can be blamed on an 82% drop in the number of aircraft orders. When transportation is taken out, orders were up 0.5% and 5.6% annually. In the core capital goods category, orders were up 0.4% and 3.5% on the year. Shipments were up 0.4% with a 1.0% rise in shipments of core capital goods. As opposed to civilian aircraft, orders for defense aircraft were up about 50%. There was also a 2.6% gain in orders for electrical equipment. Vehicle orders continued the recent sliding trend, down 1.2%. There was a 1.4% decline in orders of machinery.

Mortgage Rates

The average rate on a 30-year fixed mortgage dropped this week to the lowest it’s been this year. If you haven’t already, it’s a great time to lock your rate.

In a good sign for those in the mortgage market, the average rate on a 30-year fixed-rate mortgage with 0.5 points dropped to 3.86%, down three basis points for the week. At this time last year, the 30-year-fixed rate was at 3.43%.

Looking at shorter terms, the 15-year fixed rate with a 0.5 points was at 3.16%, unchanged from last week. At this time last year, the rate on a fixed 15-year term was 2.74%.

On a 5-year adjustable rate mortgage, the current rate is 3.17% with 0.5 points in fees and other costs. This is up one basis point on the week. A year ago, the 5-year ARM rate was 2.75%.

Stock Market

The stock market got a bit of a boost on Friday. There were hopes of movement in tax reform legislation. Traders also reacted positively to comments from Yellen and Draghi at Jackson Hole.

The Dow Jones industrial average was up 0.64% on the week after closing at 21,813.67 Friday – a gain of 30.27 points on the day. Meanwhile, the S&P 500 was up 4.08 points Friday to finish at 2,443.05 up 0.72% on the week. Finally, the Nasdaq finished at 6,265.64, down 5.68 points on the day, but up 0.79% weekly.

The Week Ahead

Monday, August 28

International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.

Tuesday, August 29

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 Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.

Wednesday, August 30

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.

Gross Domestic Product (GDP) (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.

Thursday, August 31

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.

Personal Income and Outlays (8:30 AM ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.

Pending Home Sales Index (10:00 a.m. ET) – The National Association of Realtors developed the Pending Home Sales Index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.

Friday, September 1

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.

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.

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.

There’s a ton of economic data coming out next week. We’ll be keeping a particularly close eye on the inflation metric for personal income and outlays as well as the monthly jobs report. Manufacturing data is also being thrown in for good measure.

If mortgages and economic data aren’t typically what get you going, we have plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. Labor Day marks the unofficial end of summer, so many of you might be looking to sneak in one last weekend trip. Here are some ideas for that last quick getaway.

Speaking of Labor Day, Quicken Loans will be closed for the holiday next Monday. We’ll be back Tuesday with all of the market news you can use.

This Post Has 2 Comments

  1. Interested in more information on the 1% down and quicken loans puts 2% down towards the purchase of a home if you have a credit score of at least 680 and does that include manufactured/mobile homes Thank you for you time and look forward to hearing back from you

    1. Hi Jodi:

      Unfortunately, we don’t do loans on manufactured/mobile homes. That said, if you’re still interested in the 1% down program, we can certainly help you look into your options. If you’d like to get a preapproval online, you can do so through Rocket Mortgage. Otherwise, if you’d prefer to talk to one of our Home Loan Experts, you can get in touch with us at (888) 980-6716.

      Kevin Graham

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