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Market Update - Quicken Loans Zing Blog

On the economic reports menu this week, it’s housing data with a side of jobless claims. I know your brains are hungry, so let’s dig in.

Headline News

Housing Market Index: Home builder sentiment remained unchanged at 58 in April, the third straight month it’s held that number. Present sales did have a two-point dip to 63, but expectations for sales over the next six months are up one point at 62. Traffic of potential buyers in new homes is still lower than hoped, but it is up one point to come in at 44. Looking briefly at regional data, the West is leading the way at 67. Meanwhile, the South sits at 59 and the Midwest is at 56. The Northeast continues to see drops in its importance as a bellwether of residential construction. It comes in at 44.

Housing Starts: In a potential blow for the housing market, starts were down 8.8% in March to a seasonally adjusted annualized rate of 1.089 million. The weakness in starts is roughly equal between single-family and multi-family construction. A change in New York City permit laws that went into effect last year is leading to a bunch of starts in the Northeast right now. All other regions saw declines in this area. On the permit side, they’re down 7.7% to 1.086 million. Most of the drop is tied to multi-family permits. In the regional data, the Midwest has a year-on-year gain in permits of 24.2% and the South is up 11.3% over the same period. On the downside, permits are down 6.1% annually in the West and 21.7% in the Northeast. The good news is starts are up 14.2% on the year and permits have risen to 4.6%.

MBA Mortgage Applications: Applications were up 1.3% this week. Despite the average rate on a 30-year conforming mortgage being up one basis point to 3.83%, refinances climbed 3.0%. This helped overcome a 1.0% downturn in purchase applications.

Existing Home Sales: Existing home sales were up 5.1% in March to a seasonally adjusted annualized rate of 5.330 million. They’re up 1.5% on the year. Breaking out the data by its components, single-family homes were up 5.5% to 4.760 million. Single-family home sales are up 2.6% for the year. Meanwhile, condos are up 1.8% on the month and down 6.6% for the year. On the price side, they’re up 5.0% for the month and 5.7% on the year, coming in at $222,700. There was a 5.9% gain in the number of homes on the market and supply relative to sales is up to 4.5 months from 4.4 months in February.

Jobless Claims: Initial claims for unemployment fell 6,000 last week to 247,000. The four-week average is down 4,500 to 260,500. Continuing claims are down 39,000 to 2.127 million. The four-week average of continuing claims is down 10,750 to 2.17 million.

FHFA House Price Index: House prices are up 0.4% for the month of February and 5.6% for the year. One negative is that it’s the weakest monthly gain of the year. In fact, the year-on-year rate had been 6.0% before this. The declining pace of appreciation and weakness in starts isn’t a good sign for the housing market.

Mortgage News

Mortgage rates were a mixed bag this week, mostly staying close to where they’ve been.

Thirty-year fixed-rate mortgages (FRMs) averaged 3.59% with an average 0.6 point for the week ending April 21, 2016, up from last week when they averaged 3.58%. A year ago at this time, 30-year FRMs averaged 3.65%.

15-year FRMs this week averaged 2.85% with an average 0.5 point, down from last week when they averaged 2.86%. A year ago at this time, 15-year FRMs averaged 2.92%.

Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.81% this week with an average 0.5 point, down from last week when they averaged 2.84%. A year ago, 5-year ARMs averaged 2.84%.

Stock Market

It wasn’t a good day for major players in the tech industry as Microsoft and Alphabet, the parent company of Google, both took losses in the market after missing on their earnings’ estimates. In addition to this, Amazon, Apple and Facebook all saw dips.

The Dow Jones Industrial Average was up 21.23 points to 18,003.75. It gained 0.59% on the week. The S&P 500 was up 0.10 points Friday to finish pretty much flat at 2,091.58, gaining 0.52% since last Friday. The NASDAQ alone didn’t have a great day. Bearing the brunt of the tech turmoil mentioned above, the index fell 39.66 points to close the week at 4,906.23. It was down 0.65% for the week.

The Week Ahead

Monday, April 25

New Home Sales (10:00 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month.

Tuesday, April 26

Durable Goods Orders (8:30 a.m. ET) – Durable goods orders are based on new orders placed with domestic manufacturers for factory hard goods.

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 consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.

Wednesday, April 27

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.

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

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.

Thursday, April 28

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.

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, April 29

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

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.

There’s a lot on the table next week and we’ll be here to cover it all. If economics and mortgage aren’t your thing, the Zing Blog has lots of tips to help you with your home, money and life. Subscribe below.

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