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Market UpdateHeadline News

Quicken Loans HPPI: Homeowners overvalued their homes for the 10th consecutive month, according to the Quicken Loans Home Price Perception Index. The good news is the gap is narrowing for the third consecutive month as the difference was 1.87% in November. Regionally, homeowners are overvaluing their homes by 1.52% in the West. This is followed by a difference of 1.91% in the South and 2.06% in the Midwest. Northeastern homeowners have the most overvalued homes at 2.14%. Philadelphia homeowners continue to have the most inflated perception homes with a 3.33% difference of opinion. San Jose, CA homeowners are at the opposite end of the spectrum with their homes being worth 5.15% more than they think. San Diego comes closest to par with residents only rating their home value 0.08% higher than appraisers.

Quicken Loans HVI: Home values were up 1.08% in November and they’re up 4.84% nationwide on the year. The South was up 1.65%, while the Northeast gained 1.24%. The West and Midwest lagged behind with gains of 0.57% and 0.33%, respectively.

MBA Mortgage Applications: Mortgage applications were up 1.2% for the week with refinances up 4.0% and purchases pretty much holding steady. They gained only 0.04%. Meanwhile, the average 30-year-fixed rate was up two basis points to 4.14%.

Jobless Claims: Initial claims were up 13,000 to 282,000 last week to mark their highest level since July. The four-week average fared better, up only 1,500 to 270,750. Continuing claims were also much higher, up 82,000 to 2.243 million. This pushed the four-week average 16,000 higher to 2.183 million.

Mortgage News

Mortgage rates were higher across the board last week according to Freddie Mac. There was a higher-than-expected employment report. It’s also anticipated that the Federal Reserve will be raising short-term interest rates at its meeting next Wednesday, December 16. Now would be a really good time to lock your rate.

30-year fixed-rate mortgages (FRMs) averaged 3.95% with an average 0.6 point for the week ending December 10, 2015, up from last week when they averaged 3.93%. A year ago at this time, 30-year FRMs averaged 3.93%.

15-year FRMs this week averaged 3.19% with an average 0.5 point, up from last week when they averaged 3.16%. A year ago at this time, 15-year FRMs averaged 3.20%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.03% this week with an average 0.5 point, up from last week when they averaged 2.99%. A year ago, 5-year ARMs averaged 2.98%.

1-year Treasury-indexed ARMs averaged 2.64% this week with an average 0.2 point, up from 2.61% last week. At this time last year, 1-year ARMs averaged 2.40%.

Stock Markets

The stock market didn’t have a very good day on Friday as oil prices plummeted, weighing on everything else. The international Energy Agency said the global oil glut might get worse in 2016.

The Dow Jones Industrial Average fell 309.54 points Friday to close at 17,265.21, down 3.26% for the week. Meanwhile, the S&P 500 was down 3.79% from last Friday after falling 39.86 points to 2,012.37. The NASDAQ was down 111.71 to finish at 4,933.47. This is down 4.06% week over week.

The Week Ahead

Tuesday, December 15

Consumer Price Index (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.

Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The Housing Market Index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next six months and traffic of prospective buyers in new homes.

Wednesday, December 16

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.

Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building.

Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production and the related capacity indexes and capacity utilization rates covers manufacturing, mining, and electric and gas utilities.

Thursday, December 17

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.

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