GDP: GDP growth was pulled down one-tenth of a point to come in at 2.0% in the third revision of the third quarter. Inventory growth was down $4.7 billion to $85.5 billion. This is a positive because inventories mean businesses can wait longer to hire people if demand for their product goes up. By having less inventory, they’ll have to hire more workers to produce more in order to meet demand. The amount Americans spend on services was also down 0.1% to 2.1%. Residential fixed investment was up 0.9% to 8.2% in this revision. Meanwhile, nonresidential fixed investment was up 0.2% to 2.6%. Prices remained the same in this report, up 1.3% for the quarter.
FHFA House Price Index: Home prices were up 0.5% nationwide in October. This is a rise of 6.1% for the year. Prices are up 7.9% on the year in the Pacific region and 8.9% in the Mountain region. New England and the Mid-Atlantic have slower annual growth with 2.9% and 3.1% rises, respectively.
Existing Home Sales: Sales fell 10.5% to a lower-than-expected annual rate of 4.760 million in November. This dragged sales down 3.8% year on year. The National Association of Realtors, which puts out the report, attributes the weakness to delays caused by the implementation of some new regulations within the mortgage industry. They expect a boost in December closed sales. Single-family sales were down 12.1% to 4.150 million. Condos were actually up 1.7% to 610,000. All four regions are down month-to-month and the Northeast is the only one to show a year on year gain, up 1.5%. The median home price for an existing home was up 0.5% to $220,300.
MBA Mortgage Applications: Mortgage applications were up 7.3% as purchases rose 4.0% and refinances were up 11.0%. The average rate on a 30-year fixed-mortgage was up two basis points to 4.16%.
Durable Goods Orders: Manufacturing was unchanged in November, and now the same story seems to be repeating itself for new durable goods orders, which are also flat. They remain 1.2% higher on an annual basis. Unfortunately, the news only gets worse from there. Core capital goods fell 0.4% on the month and are down 1.8% on the year. Excluding transportation, new orders were down 0.1% and down 1.9% year to year. Inventories also fell 0.3% as manufacturers are keeping less in stock due to weaker demand. The only other positive is that shipments were up 0.9%.
Personal Income and Outlays: Incomes rose 0.3% in November and wages and salaries were up 0.5%. Personal spending matched the 0.3% income rise. Prices remained flat month-to-month and are only up 0.4% on the year. Meanwhile, prices in core categories were up just 0.1% and 1.3% on an annual basis. This inflation is lower than the 2% target the Federal Reserve would like to hit. Low oil prices are keeping costs down for the consumer.
New Home Sales: New home sales were up 4.3% to a seasonally-adjusted annual rate of 490,000. The news wasn’t all good. October sales were revised 25,000 lower to 470,000. More new houses were added to the market this month with 5,000 being added to the inventory to come in at 232,000. Supply in the market is at 5.7 months, which is down slightly from October. Prices were also up 6.3% in November to $305,000 for the average new home. This is a gain of 0.8% for the year. Regionally, sales are uneven. The West is up 20% for the month and 4.7% year on year. The South is up 4.5% on the month and 19.4% since last November. Meanwhile, the Northeast and Midwest have shown monthly and yearly declines in sales.
Consumer Sentiment: Consumer sentiment was up 0.8 points to 92.6 in its final December reading. Current conditions is up 1.1 points from its mid-month reading to 108.1. The expectations component is pretty much flat compared to last month at 82.7, which may indicate consumers are softening their outlook on jobs. Inflation expectations are unchanged from the last measurement with both the one- and five-year outlook for price changes at 2.6%.
Jobless Claims: Initial claims are 5,000 lower to come in at 267,000. However, the four-week average was up 1,750 to 272,500. Continuing claims fell 47,000 to 2.20 million. The four-week average was up 10,000 to 2.21 million.
Mortgage rates pretty much held close to where they were the previous week, according to Freddie Mac data.
30-year fixed-rate mortgages (FRMs) averaged 3.96% with an average 0.6 point for the week ending December 24, 2015, down from last week when they averaged 3.97%. A year ago at this time, 30-year FRMs averaged 3.83%.
15-year FRMs this week averaged 3.22% with an average 0.6 point, unchanged from last week. A year ago at this time, 15-year FRMs averaged 3.10%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.06% this week with an average 0.4 point, up from last week when they averaged 3.03%. A year ago, 5-year ARMs averaged 3.01%.
1-year Treasury-indexed ARMs averaged 2.68% this week with an average 0.2 point, up from 2.67% last week. At this time last year, 1-year ARMs averaged 2.39%.
There was very little movement during a shortened Christmas Eve trading session. Stocks were mixed, but they held on to most of their weekly gains.
The Dow Jones Industrial Average made the biggest move of the day Thursday, closing down 50.44 points at 17,552.17. Even with the drop, it gained 2.47% over the week. The S&P 500 ended the day unchanged at 2,060.99, a 2.76% weekly gain. The NASDAQ showed very little movement as well, up just 2.56 points to finish the week at 5,048.49, a 2.55% improvement over last Friday.
The Week Ahead
Tuesday, December 29
S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller home pricing index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.
Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.
Wednesday, December 30
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.
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.
Thursday, December 31
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. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, January 1
The markets are closed. The Quicken Loans Zing Blog team would like to wish you a happy and prosperous new year!
We just dropped a lot of information on you. If you like what you see, subscribe below for the most updated information affecting your home, money and life.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.