Market UpdateHeadline News

Quicken Loans HPPI/HVI: Homeowners rated their home values 0.69% higher than appraisers did on a nationwide basis in April. However, with a difference of less than 1%, the gap is minimal. Appraiser ratings of property value were still higher than those of homeowners in 63% of measured metro areas. Meanwhile, home values bounced back, rising 0.28% in April following a slight decline in March. There were gains in all regions, and home values were up 5.54% nationwide since this time last year.

MBA Mortgage Applications: The index for mortgage applications fell 3.5% last week as purchases fell 0.2%. Refinances dropped 6.0% as the average rate for a 30-year fixed-rate mortgage jumped 8 basis points to 4.00%.

Retail Sales: April retail sales were flat in comparison to March. Motor vehicle sales were down 0.4%, and department store sales experienced a 2.2% drop. Excluding motor vehicles sales, the index was up 0.1% for the month, a figure that increases to 0.2% when gas is also excluded. Electronics and appliances had their seventh straight decline, dropping 0.4%. There were also drops in the categories of furniture and food and beverages.

Jobless Claims: Initial jobless claims fell by 1,000 this week, coming in at 264,000. This brought the four-week average down 7,750, settling at 271,750. Continuing claims for the week of May 2 were unchanged at 2.229 million. The four-week average fell 12,000 to 2.260 million. Both are 15-year lows.

Producer Price Index (PPI): Producer prices were down 0.4% in April and down 1.3% for the year as inflation remains a non-issue. Excluding food and energy, prices were down 0.2%. Year-over-year, prices were down 1.3% overall. Energy prices were down 2.9% despite a rise in the price of oil. Food prices were down 0.9% and down 4.2% for the year. Service prices were up 0.9%, but this was below the Fed inflation target of 2.0%.

Industrial Production: Production fell 0.3% in April, the fifth straight month with a contraction. Factories used less of their capacity, with this metric falling 0.4% to 78.2% month to month. Manufacturing was flat for the month. Consumer goods fell 0.3%, while business goods were down 0.4%. Mining was down 0.8%, and utilities fell 1.3%. Auto production did have a strong showing, up 1.3% for the month.

Consumer Sentiment: Consumer sentiment fell 7.3 points to 88.6 this month. Current conditions ratings were down 7.2 points to 99.8. Expectations for the economy were down 7.3 points to 81.5. Inflation expectations rose with increasing gas prices as one-year inflation expectations were up 0.3% to 2.9%. Meanwhile, five-year expectations were at 2.8%, up 0.2%.

Mortgage News

With the exception of 5-year adjustable rate mortgages, rates were up this week.

30-year fixed-rate mortgages (FRMs) averaged 3.85% with an average 0.6 point for the week ending May 14, 2015, up from last week when they averaged 3.80%. A year ago at this time, 30-year FRMs averaged 4.20%.

15-year FRMs this week averaged 3.07% with an average 0.6 point, up from last week when they averaged 3.02%. A year ago at this time, 15-year FRMs averaged 3.29%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.89% this week with an average 0.5 point, down from last week when they averaged 2.90%. A year ago, 5-year ARMs averaged 3.01%.

1-year Treasury-indexed ARMs averaged 2.48% this week with an average 0.4 point, up from last week when they averaged 2.46%. At this time last year, 1-year ARMs averaged 2.43%.

Stock Markets

Stock results were mixed on Friday as a result of disappointing economic data. The Dow Jones Industrial Average was up 20.32 points Friday to close at 18,272.56, a 0.45% weekly gain. The S&P 500 set another new record to end the week, closing up 1.63 points at 2,122.73. This was a 0.31% weekly gain. The NASDAQ finished down 2.50 points, closing at 5,048.29. Despite this, it gained 0.89% on the week.

The Week Ahead

Tuesday, May 19

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.

Wednesday, May 20

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, May 21

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.

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

Friday, May 22

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.

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

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