Market UpdateHeadline News

Housing Market Index: Home builder confidence in the market slipped to 54 this month, down from 56 in April. There was a 2-point dip in the present sales metric to 59. The level of prospective buyers coming into new homes, already very lackluster, fell a point to 39. There was a 1-point gain in the future sales metric to 64.

Housing Starts: Warmer weather has finally started having a positive impact on the construction of new homes, according to April numbers. Starts in April were up 20.2% to 1.135 million. Meanwhile, permits were up 10.1% to 1.143 million. Single-family starts were at 733,000, up 16.7% on the month, while 402,000 multifamily starts represented a 27.2% gain. Builders took out 477,000 multifamily permits, a 5.5% gain year over year. Meanwhile, single-family permits were up 666,000 for a 7.1% gain since last April.

MBA Mortgage Applications: Applications were down 1.5% this week. Purchases fell off 4.0%, while refinances gained 0.3% in application volume despite the average rate for a 30-year fixed-rate mortgage rising 5 basis points to 4.04%. This is the highest the rate has been all year.

Jobless Claims: Initial claims were up 10,000 this week to 274,000. Meanwhile, the four-week average of initial claims was 5,000 lower at 266,250. Continuing claims were down 12,000 to 2.211 million. The four-week average was down 29,000 to 2.230 million.

Existing Home Sales: Existing home sales were down 3.3% this month for an annual pace of 5.04 million. Three of the nation’s four regions experienced dips, with the South leading the way with a 6.8% decline. Despite this, sales were up 6.1% for the year. Meanwhile, 200,000 existing homes went on the market in April, increasing supply from 4.6 months to 5.3 months. There was also a 4.1% rise in the median price for an existing home to $219,400. The Wall Street Journal put together a cool infographic showing a few factors that might be causing home prices to rise.

Consumer Price Index (CPI): Prices rose a minuscule 0.1% in the month of April. This means prices are down 0.2% for the year. Medical costs did rise 0.7%, a very steep gain. Rising rents pushed the price of shelter up 0.3%. Furniture and used cars experienced rises of 1.3% and 0.6%, respectively. The price of gasoline was down 1.7% in a month, while the cost of plane tickets fell 1.3%. Overall, the CPI without food and energy is up 0.3% and has risen 1.8% from last year.

Mortgage Rates

Everything except the 1-year adjustable rate mortgage rate was slightly down this week.

30-year fixed-rate mortgages (FRMs) averaged 3.84% with an average 0.7 point for the week ending May 21, 2015, down from last week when they averaged 3.85%. A year ago at this time, 30-year FRMs averaged 4.14%.

15-year FRMs this week averaged 3.05% with an average 0.6 point, down from last week when they averaged 3.07%. A year ago at this time, 15-year FRMs averaged 3.25%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.88% this week with an average 0.5 point, down from last week when they averaged 2.89%. A year ago, 5-year ARMs averaged 2.96%.

1-year Treasury-indexed ARMs averaged 2.51% this week with an average 0.4 point, up from last week when they averaged 2.48%. At this time last year, 1-year ARMs averaged 2.43%.

Equity Markets

The markets were down on Friday, failing to sustain the high levels seen during the week. The Dow Jones Industrial Average was down 0.22% on the week after losing 53.72 points Friday to close at 18,232.02. Meanwhile, the S&P 500 was down 4.75 points, closing at 2,126.07, a 0.16% weekly gain. Despite dropping 1.43 points Friday to close at 5,089.36, the NASDAQ was up 0.81% last week.

The Week Ahead

Tuesday, May 26

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

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing, using data provided by Fannie Mae and Freddie Mac. The House Price Index is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

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.

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.

Wednesday, May 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.

Thursday, May 28

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.

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, May 29

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.

Consumer Sentiment (9:55 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.

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

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