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Market Update - Quicken Loans Zing Blog

Headline News

Quicken Loans Home Price Perception Index (HPPI): The gap between homeowner and appraiser opinions of value fell to 1.75% in January, marking the fifth consecutive month the differences narrowed. The West had the smallest gap, with homeowners overvaluing their homes by just 1.48%. Meanwhile, homeowners in the South are next at 1.71%. The Northeast is at 1.98%, while homeowners in the Midwest are off by 2.04% in their estimates. San Jose, CA homeowners continued to have the most undervalued homes, coming in at 4.79% under appraiser estimates. Philadelphia homeowners have an inflated opinion as their estimates of value are 3.64% above those of appraisers. Miami comes closest to par with estimates just 0.16% below appraisers’ opinions.

Quicken Loans Home Value Index (HVI): Home values were down 0.42% in January, but they’re still up 3.37% since this time last year. In the Midwest, home values were down 2.44% in the month of December. It was followed by the Northeast, down 1.43%, and the West which was down 1.26%. The South was the only region to show improvement, up 1.14% for the month.

MBA Mortgage Applications: Mortgage applications were up 9.3% overall as refinances were up 16.0%. Purchases, which are less affected by fluctuating rates, were up only 0.2%. The average rate for a 30-year conforming mortgage was down six basis points to 3.91% last week.

Jobless Claims: Initial claims fell 16,000 to 269,000 last week. This was well below consensus estimates for 281,000 claims. The four-week average is down 3,500, coming in at 281,250. Continuing claims also showed improvement, down 21,000 at 2.249 million. The four-week average fell 6,000 for a total of 2.248 million.

Retail Sales: Retail sales were up 0.2% for the month of January. This number was pulled down by lower gas prices. If you take out gas prices, retail sales were up 0.4% and 3.8% on the year. Cars also had a strong month as when you take out automobiles, they’re only up 0.1% on the month. Sales of vehicles were up 0.6% and 6.9% on the year. General merchandise sales were up 0.8%. Nonstore retailers were up 1.6% in a good sign for e-commerce. In more of a downer, restaurant sales fell 0.5% in January to go along with a matching drop in furniture sales. Sporting goods are down 9.1% for the year.

Consumer Sentiment: Consumer attitudes worsened slightly as they fell 1.3 points to 90.7. However, it’s still sitting near the average for the prior four months. Current conditions is down 0.8 points to 105.8 points, but it’s still strong. Expectations are down 1.7 points to 81.0. Turning to inflation predictions, the five-year outlook is down 0.3% to 2.4%. Meanwhile, one-year expectations are flat at 2.5%.

Mortgage News

Mortgage rates were down across the board again this week as market turmoil has people flooding the bond market and keeping rates down.

30-year fixed-rate mortgages (FRMs) averaged 3.65% with an average 0.5 point for the week ending February 11, 2016, down from last week when they averaged 3.72%. A year ago at this time, 30-year FRMs averaged 3.69%.

15-year FRMs this week averaged 2.95% with an average 0.5 point, down from 3.01% last week. A year ago at this time, 15-year FRMs averaged 2.99%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.83% this week with an average 0.4 point, down from last week when averaged 2.85%. A year ago, 5-year ARMs averaged 2.97%.

Stock Market

Stocks were up on Friday, ending days of declines. This was partially caused by the fact that oil stocks were up over 12%. It’s still low enough at this point that gas prices didn’t move too much. It was $1.46 per gallon at a gas station near my home in suburban Detroit this morning. My wallet is pretty happy at the moment.

The Dow Jones Industrial Average was 313.66 points higher Friday to close at 15,973.84. Despite the strong finish, it was down 1.45% for the week. The S&P 500 was down 0.82% from last Friday’s close after finishing the week up 35.70 points at 1,864.78. Finally, the NASDAQ was up 70.67 points to close at 4,337.51, falling 0.59% for the week.

The Week Ahead

Monday, February 15

The markets are closed for Presidents’ Day.

Tuesday, February 16

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.

Wednesday, February 17

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at 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.

Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers of goods and services.

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.

Thursday, February 18

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.

Friday, February 19

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.

It looks like lots of good stuff is packed into a short week for the markets. If you want more of this, plus all the home, money and life goodness you can handle, subscribe to the Zing Blog below.

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