Market Update - Quicken Loans Zing Blog

It’s a very light week on the economic calendar. That is, until we get to Friday when the Big Kahuna of monthly economic reports comes out. The jobs report always has the potential to swing the markets in one direction or another. It’s hard to say what kind of effect it will have while Brexit is still at the forefront of everyone’s mind. Still, its impact should never be underestimated.

Headline News

MBA Mortgage Applications: Brexit has had a big impact on mortgage rates as investors fly to safer investments in the bond market. Those in the market for a mortgage reacted in a huge way last week with refinance applications up 21.0% and purchase applications up 4.0%. This pushes applications up 14.2% overall. The average rate on a 30-year fixed-rate mortgage fell to 3.66%, dropping nine basis points.

International Trade: The U.S. trade deficit was up $3.7 billion in May to $41.1 billion. The goods deficit was up $3.6 billion to $62.2 billion while the services deficit was down slightly to $21.1 billion. Imports were up 1.9%. A lot of this had to do with a jump in gas price, but also consumer goods and cars saw gains. In a negative, exports were weaker with capital goods and civilian aircraft both falling quite a bit.

Jobless Claims: Initial jobless claims were down 16,000 to 254,000. The four-week average was down 2,500. Continuing claims were down 44,000 to 2.124 million. Meanwhile, the four-week average was up light 3,000, coming in at 2.15 million.

Employment Situation: Nonfarm payrolls came back with a vengeance in June after an incredibly disappointing May. There were 287,000 jobs added; 265,000 of these from private payrolls. The participation rate also ticked up 0.1% to 62.7%. The downside is that that unemployment increased 0.2% to 4.9%. Average hourly earnings were up 0.1% and the average workweek remained at 34 hours, 24 minutes. Telecommunications was up 28,000 after recovering from the Verizon workers strike. Manufacturing was also up 14,000, as were retail, government and finance.

Mortgage News

Mortgage rates were still feeling the impact of Brexit last week. I realize this is a mortgage company blog, so it can sound like a broken record, but there really has never been a better time to get a mortgage. Lock in now before rates go back up.

30-year fixed-rate mortgages (FRMs) averaged 3.41% with an average 0.5 point for the week ending July 7, 2016, down from last week when they averaged 3.48%. A year ago at this time, 30-year FRMs averaged 4.04%.

15-year FRMs this week averaged 2.74%, down 7 basis points during the week. A year ago at this time, 15-year FRMs averaged 3.20%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.68% this week with an average 0.5 point decrease, down from last week when they averaged 2.70%. A year ago, 5-year ARMs averaged 2.93%.

Stock Market

Much higher than expected jobs numbers cause stocks to bounce upward Friday, recovering all of their post-Brexit losses.

The Dow Jones Industrial Average was up 250.86 point to finish the week 18,146.74. It gained 1.1% for the week. Meanwhile, the S&P 500 was up 1.3% from last Friday’s close. It was up 32.00 points Friday to close at 2,129.90. Finally, the NASDAQ rose 79.95 points to end the week at 4,956.76, rising 1.9% on the week.

The Week Ahead

Tuesday, July 12

Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month that compares what people think their homes are worth with the opinions of appraisers. Similar opinions of value often make for smoother purchase and refinance transactions.

Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, both on the national and regional level. Homeowners can gain a perception of whether values are increasing or decreasing and get a better idea of where they stand in terms of equity.

Wednesday, July 13

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.

Thursday, July 14

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.

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 for the sale of goods and services.

Friday, July 15

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.

Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell 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.

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.

It’s an action-packed week (or as action-packed as economists get, anyway) of reports. We’ll have it all covered. If all this mortgage and economic stuff bores you to tears, we have plenty of home, money and lifestyle content to keep you going throughout the week. Subscribe to the Quicken Loans Zing Blog below.

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