Market Update - Quicken Loans Zing Blog

I started yesterday very excited. I have an upcoming post that required me to do some research on video games. I’m a big fan of anything that lets me spend a little time just playing. Unfortunately, I discovered my computer was a little sluggish to say the least when I downloaded one of the games. Maybe it’s time for a new one.

The entire market was a little sluggish on the data side this week. Let’s see what happened.

Headline News

Quicken Loans Home Price Perception Index (HPPI): Homeowners overestimated their property value by 1.55% in July, according to Quicken Loans data. Still, they were 0.15% closer to harmony with actual appraisal values than they were in June. In terms of the regional data, homeowners in the Northeast were furthest from appraisers, overvaluing properties by 1.73%. The Midwest and South followed at 1.68% and 1.53%, respectively. Homeowners in the West were closest, just 1.30% high. Dallas is now the nation’s hottest housing market, with appraisals coming in 2.83% higher than estimates from homeowners. Philadelphia and Baltimore were at the other end of the spectrum with estimates being 3.04% above appraisal. Riverside, Calif. homeowners have a pretty good handle on home values, overestimating by just 0.02%.

Quicken Loans Home Value Index (HVI): Home values were up 0.33% in July and have gone up 4.21% on the year across the nation. They rose 1.60% in the Northeast and are up 2.65% on the year. Properties in the South were up 0.67% and 4.34% annually. In the West, prices are up 5.64% on the year and 0.28% in July. Midwestern homeowners had property values rise 0.23%. Values in the region are up 3.63% on the year.

MBA Mortgage Applications: The average rate on a 30-year fixed mortgage was down three basis points to 4.14%. This helped boost applications, which were up 3.0% overall. Purchases rose 1.0% and refinances were up 5.0%.

Jobless Claims: Initial jobless claims were up slightly, rising 3,000 to 244,000. The four-week average was down 1,000 to 241,000. Meanwhile, on the continuing claims side, they fell 16,000 to 1.951 million. The four-week average of continuing claims was unchanged at 1.965 million.

Producer Price Index (PPI): On the producer’s side, prices fell 0.1% and have risen just 1.9% on the year. This 0.1% decrease also remains when food and energy are taken out. Without these categories, inflation is up 1.8% on the year. When trade services were further removed, prices were flat on the month and are up 1.9% annually. Going to be on the top line numbers, service prices were down 0.2% and trade services fell 0.5% with chemical and machinery prices falling. The price of goods was also down 0.1% and energy prices were down 0.3%, with no change for the price of food. The entire report points to deflation.

Consumer Price Index (CPI): Inflation on the consumer side was also very soft, up only 0.1% in July. It’s now risen 1.7% annually. This is below the 2.0% target the Federal Reserve would like to see for continued economic growth in order to keep raising interest rates back to normal levels. The same monthly and annual numbers persist even when food and energy are taken out. Housing costs are only up 0.1%, up only 2.8% on the year in this index. Wireless service prices were down 0.3%. They’ve dropped 13.3% this year as providers attempt to give customers better prices to gain market share. Prices for vehicles were down 0.5% and motel and hotel prices were down 4.2%. Apparel prices were up 0.3%, although they’ve fallen 0.4% on the year. Medical care was up 0.4%. Food prices were up 0.2%. Finally, energy prices fell 0.1%.

Mortgage Rates

Mortgage rates fell last week. Some Federal Reserve officials said weak inflation data might delay future short-term interest rate increases.

With that said, some key data on industrial production and housing starts comes out this week that have the potential to move the market. If you’re in the market to buy or refinance, it’s still a great time to lock your rate.

This week, 30-year fixed-rate mortgages (FRMs) averaged 3.90% with an average 0.5 point for the week ending August 10, 2017, down from last week when they averaged 3.93%. A year ago at this time, 30-year FRMs averaged 3.45%.

On the short-term side, 15-year FRMs this week averaged 3.18% with an average 0.5 point, the same as last week. A year ago at this time, 15-year FRMs averaged 2.76%.

Finally, 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.14% this week with an average 0.5 point, down from last week when they averaged 3.15%. A year ago at this time, 5-year ARMs averaged 2.74%.

Stock Market

The stock market had its worst week in a while amid plenty of talk in the political sphere including verbal sparring between North Korea’s dictator Kim Jong Un and President Trump.

Despite being up 14.31 points Friday to close at 21,858.32, the Dow Jones industrial average fell 1.06% on the week. The S&P 500 fell 1.43% on the week after finishing Friday at 2,441.32, up 3.11 points. The NASDAQ finished the week at 6,256.56, which was up 39.68 points on the day but down 1.50% on the week.

The Week Ahead

Tuesday, August 15

Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.

Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey where respondents from the organization are asked to rate the general economy and housing market conditions. The 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, August 16

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.

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.

Thursday, August 17

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.

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.

Friday, August 18

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.

The biggest reports coming this week are probably housing starts, industrial production and consumer sentiment. We’ll be keeping a close eye on those.

If you’re not into all this mortgage and finance stuff, we’ve got plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. Before I go and drop some outrageous amount on a new laptop, it would probably be a good idea to give it a little overdue spring cleaning. Here’s a great post on doing some digital deep cleaning. Have a great week!

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