MBA Purchase Applications – Purchases rose 1.0% in the week of December 5. Refinances were up 13.0%, making up for last week’s 13.0% drop. This put the composite index up 7.3%.
Jobless Claims – The report was mostly negative this week. While initial claims fell 3,000 to 294,000, the four-week rolling average is at 299,250. This is about 15,000 higher than early November. Meanwhile, continuing claims were up 142,000 to 2,514,000 for the week of November 29. This brought the four-week average up 28,000 to 2,386,000. Unemployment was up a tenth to 1.9%.
Retail Sales – Retail sales continued their current upward trend, posting a 0.7% improvement for the month of November. The biggest gains were in building materials and garden equipment (up 1.4%), clothing and accessories (up 1.2%), and non-store retailers (up 1.0%). Automobile sales were up 1.7% for the month, and gasoline sales fell 0.8% due to falling prices.
Producer Price Index (PPI) – The total PPI declined 0.2% for the month of November. Excluding food and energy, the index was flat for the month. The final demand for goods fell 0.7%, and the demand for energy fell 3.1%. Final demand services were up 0.1%. A year ago, PPI final demand was up 1.4%.
Consumer Sentiment – Consumer sentiment is up five points to 93.8 in its mid-December reading – this is the strongest rating since January 2007. The current conditions indicator is up 3.0% to 105.7 since its final November reading. Expectations are up to 86.1. The rise of 6.2 points signals rising confidence in the outlook for income and jobs. The falling price of gasoline is also contributing to bettering consumer sentiment.
With the exception of the 1-year adjustable-rate mortgage, all other rates were up this week.
30-year fixed-rate mortgages (FRMs) averaged 3.93% with an average 0.5 point for the week ending December 11, 2014, up from last week when they averaged 3.89%. A year ago at this time, the 30-year FRMs averaged 4.42%.
15-year FRMs this week averaged 3.20% with an average 0.5 point, up from last week when they averaged 3.10%. A year ago at this time, the 15-year FRMs averaged 3.43%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.98% this week with an average 0.5 point, up from last week when they averaged 2.94%. A year ago, the 5-year ARMs averaged 2.94%.
1-year Treasury-indexed ARMs averaged 2.40% this week with an average 0.4 point, down from last week when they averaged 2.41%. At this time last year, 1-year ARMs averaged 2.51%.
The Dow Jones Industrial Average declined 315.51 points on Friday, finishing down 3.8% for the week at 17,280.83. The S&P 500 was down 32.99 points Friday to finish at 2,002.34, and it dropped 3.5% for the week. The NASDAQ was down 2.7% on the week finishing at 4,653.60. The drop in the markets is blamed on decreasing crude-oil prices.
The Week Ahead
Monday, December 15
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, December 16
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, December 17
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.
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.
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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