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Market Update - Quicken Loans Zing Blog

I’m still riding high on one of the better football games I’ve ever seen as a Detroit Lions fan last night. Sorry to the region of New England, but honestly, no one can wipe the smile off my face. I’m not purchasing tickets to the big game or anything, but it was encouraging to see.

Let’s see if the economic data matches my mood.

Headline News

Housing Market Index

Home builder confidence in the housing market has held steady in September, coming in at 67. While still strongly indicating growth in the market, these are among the weakest levels since last September.

Sales indications are very strong at the moment. Current sales are up one point at 74 while future sales were up two points to hit the same level. Lack of traffic of potential buyers in new homes is the factor driving the report down. It comes in at 49, which means traffic is slightly declining.

MBA Mortgage Applications

Mortgage applications were up 1.6% overall last week. Applications to purchase were up 0.3% and refinance applications were up 4%.

The increase happened despite the average rate on a conforming 30-year fixed mortgage being up four basis point to 4.88% in this data.

Housing Starts

The number of houses with construction starting in August was up 9.2% to a seasonally-adjusted annual rate of 1.282 million. Multifamily homes were up 29% on the month to come in at 406,000. The year on year rate is suddenly at 38% after being on the minus side of the ledger for most of the year. On the single-family side, these were up 1.9% to come in at 876,000. However, that’s still down 0.2% on the year.

On the flip side of the coin, housing permits were down 5.5% overall. Multifamily starts are down 17.7% and single-family starts were down 6.1%. Total permits were at a seasonally-adjusted level of 1.229 million.

Finally, single-family home completions are up 11.6% to come in at 923,000, which is good news because the market in this area is really craving supply. On the downside, supply in the multifamily market was down 18.5% to 290,000.

Jobless Claims

Initial jobless claims fell 3,000 last week to come in at a very low level of 201,000. The four-week average was down 2,250, settling at 205,750. These were both 50-year lows.

Meanwhile, continuing claims also had a very good week, down 55,000 to 1.645 million. This was a 46-year low, as was the four-week average number which came in at 1.692 million after falling 20,000 last week.

Existing Home Sales

Existing home sales were flat for the month of August, maintaining a seasonally-adjusted annualized rate of 5.34 million. This misses the analyst estimate of a 5.36 million number and is also down 1.5% on the year.

Sales for both single family homes and condos were unchanged at 4.75 million and 590,000 respectively. Sales of single-family homes are down 1% annually with condos falling 4.8%.

Meanwhile, supply was also flat at 1.920 million. Supply on the market relative to sales is also not moving at 4.3 months. It’s as if everything was maintaining the status quo.

The median price of existing homes was down 1.7% last month as sellers may have been trying to attract the last few summer buyers. The median price settled at $264,000.

Mortgage Rates

Mortgage rates again pushed up for the most part last week. In addition to the prevailing upward trend in rates over the last several weeks, there’s also the upcoming Federal Reserve Open Market Committee meeting. It’s widely anticipated that the Fed officials will raise the benchmark short-term interest rate under their control.

Although this rate isn’t directly tied to the rates for longer-term loans, there is a positive correlation between short-term rates and the direction of any number of consumer interest rates including mortgages.

With the current rate environment, it’s not a bad idea to lock your rate if you’re in the market to purchase or refinance and like the rate you see. If you’re in the market to purchase, it’s a great time to look at our RateShield™ Approval. Available on 30-year conventional, FHA and VA loans, this option allows you to lock your interest rate for up to 90 days while you shop for a new home.1 Moreover, should rates be lower by the time you have a purchase agreement in place, we’ll give you the lower rate. It’s a win-win!

According to Freddie Mac, the average rate on a 30-year conforming fixed mortgage was 4.65% with 0.5 points in fees, up five basis points on the week. This is up from 3.83% last year at this time.

Looking at shorter terms, the 15-year fixed mortgage averaged 4.11% with 0.5 points last week, up five basis points from the week prior. A year ago, rates for a 15-year-fixed mortgage averaged 3.13%.

Finally, looking at adjustable rates, the average rate on a 5-year treasury-indexed, hybrid ARM was down one basis point to 3.92% with 0.4 points paid. The average rate last year was 3.17%.

Stock Market

The stock market had a fairly good week. The Dow and S&P 500 both finished the week at record highs. Meanwhile, the Nasdaq was down on the week. In the ongoing ups and downs of the trade war, people were less concerned this week.

Are you in our Fantasy Stock League? You can compete for prizes that are given every other month as well as the big grand prize given at the end of the year for the contestant with the best overall portfolio.

The Dow Jones industrial average closed at a record high of 26,743.5 points. It was up 86.52 points on the day and 2.25% on the week. Meanwhile, the S&P 500 was down 1.08 points on the day to close at 2,929.67, up 0.85% on the week. Finally, the Nasdaq was down 0.29% on the week to finish at 7,986.96, down 41.28 points on the day.

The Week Ahead

Tuesday, September 25

S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

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.

Wednesday, September 26

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.

New Home Sales (10:00 a.m. ET) – This measures the number of newly constructed homes with a committed sale during the month.

Federal Reserve Rate Decision (2:00 p.m. ET) – The Federal Reserve meets regularly to decide the future of short-term interest rates. Although not directly tied to longer-term rates like those for mortgages, there’s a positive correlation between the direction of these rates and those of mortgages and many other consumer borrowing costs.

Thursday, September 27

Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory goods.

Gross Domestic Product (GDP) (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.

International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.

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.

Pending Home Sales Index (10:00 a.m. ET) – The National Association of REALTORS® developed the Pending Home Sales Index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.

Friday, September 28

Personal Income and Outlays (8:30 a.m. ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.

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.

There’s lots of heavy-heading economic data including GDP, personal incomes and durable goods orders. Additionally, as mentioned above, the Federal Reserve has its meaning to set the direction of short-term interest rates. Buckle up because it’s going to be busy. We’ll have it all covered for you next Monday!

We get that economic and market data isn’t always the thing that keeps people awake on a sleepy Monday afternoon. Not to worry. We’ve got plenty of other home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. In the world of internet holidays, tomorrow is Cooking Day. Now that the season has turned to Autumn, we thought it would be the perfect time to share some squash-inspired recipes. Have a great week!

1 RateShield Approval locks your initial interest rate for up to 90 days on 30-year conventional, FHA and VA fixed-rate purchase loan products. Your exact interest rate will depend on the date you lock your rate. Once you submit your signed purchase agreement, we’ll compare your rate to our published rates for that date and re-lock your interest rate at the lower of the two rates for an additional 40 to 60 days. Quicken Loans reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Quicken Loans. This is not a commitment to lend. Additional conditions or exclusions may apply.

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