MBA Purchase Applications: Purchase applications were up 2.0% for the week. A rate increase of five basis points bringing the average mortgage rate to 4.01% caused the refinance index to drop 3.0%. Overall numbers were down 1.3% for the week.
Jobless Claims: Initial jobless claims were down 36,000 to 289,000 this week. This pushed the four-week average down 3,750 to 302,250, up 10,000 from this time in February. Continuing claims were down 5,000 for the week to 2.418 million. The four-week average was up 13,000 to 2.417 million. This is up 20,000 from where it was a month ago.
Retail Sales: Retail sales were down 0.6% February after being down 0.8% in January. This is blamed on auto sales, which dropped 2.5% this month. Excluding auto sales, the drop in retail was only 0.1%. Some of the drop may have also related to bad weather across the country. There were declines in furniture, electronics, building materials and garden equipment, as well as general merchandise and food and drink. Gas prices actually went up 1.5% in February, ending long declines.
Producer Price Index (PPI): Total final demand fell 0.5% month to month. Expectations were for a 0.3% rebound. Energy prices were flat for the month, while food prices decreased 1.6%. Outside food and energy, PPI was down 0.5% month to month. Producer prices are down 0.7% from February of last year.
Last week’s strong employment situation report drove mortgage rates higher across the board.
30-year fixed-rate mortgages (FRMs) averaged 3.86% with an average 0.6 point for the week ending March 12, 2015, up from last week when they averaged 3.75%. A year ago at this time, 30-year FRMs averaged 4.37%.
15-year FRMs this week averaged 3.10% with an average 0.6 point, up from last week when they averaged 3.03%. A year ago at this time, 15-year FRMs averaged 3.38%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.01% this week with an average 0.5 point, up from last week when they averaged 2.96%. A year ago, 5-year ARMs averaged 3.09%.
1-year Treasury-indexed ARMs averaged 2.46% this week with an average 0.4 point, up from last week when they averaged 2.44%. At this time last year, 1-year ARMs averaged 2.48%.
The major stock indexes fell Friday on fears that the Federal Reserve would announce rate hikes Wednesday. The Dow Jones Industrial Average was down 145.91 points to close at 17,749.31, down 0.6% for the week. The S&P 500 lost 12.55 points Friday to 2,053.40, a 0.86% weekly loss. The NASDAQ dropped 21.53 points to 4,871.76, a week-over-week decline of 1.1%.
The Week Ahead
Monday, March 16
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 cover manufacturing, mining and electric and gas utilities.
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.
Tuesday, March 17
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, March 18
MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, March 19
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.
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