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Market Update - Quicken Loans Zing Blog

We hope everyone had a good holiday weekend. As everyone knows, there’s no better way to emerge from a chocolate coma than with all of the mortgage and economic news you can handle. There wasn’t much on the calendar to start the week, but it did pick up near the end. We saw lots of housing and inflation data.

Headline News

Quicken Loans Home Price Perception Index (HPPI): The difference of opinion on home value was up to 1.77% in March after homeowners overestimated property value by 1.69% in February. Homeowners in the West overestimated value by just 1.46%. Southern and Northeastern homeowners were off by 1.75% and 1.94%, respectively. Homeowners in the Midwest had a difference of 1.96%. Denver continues to be the hottest housing market surveyed, with appraisals coming in 2.69% higher than owner estimates. Philadelphia residents are inflating their property value by 3.20%. In Riverside, California., owners overestimated value by just 0.04%.

Quicken Loans Home Value Index (HVI): Despite the gap in appraiser and homeowner opinion, home values were up in March, rising 0.63% nationwide. On the regional side of things, homes in the Northeast saw the biggest jump, up 1.78% on the month and 3.85% yearly. The Midwest rose 0.86% and 2.11%, respectively. The South was up 0.84% in March and 4.67% since the same time last year. Values in the West were up 0.71%, with an annual increase of 3.61%.

MBA Mortgage Applications: Purchase applications were up 3.0%, which helped lift overall applications 1.5% higher despite applications on the refinance side being flat. The rate on a 30-year fixed mortgage fell 6 basis points to 4.28%.

Jobless Claims: Initial claims were down 1,000 to 234,000 last week. This pushed the four-week moving average down 3,000 to 247,250. Continuing claims were down 7,000 to 2.028 million. The four-week average was up 750 to about 2.026 million.

Producer Price Index (PPI): Prices actually fell on the producer’s side, down 0.1% for March. They’ve risen 2.3% annually. When food and energy were taken out, prices were flat and up 1.6% on the year. When trade services are further removed, prices rose just 0.1% and are up 1.7% annually. Digging a little deeper into the details, prices for both goods and services are down 0.2%. Food prices were up 0.9%, but this was more than offset by a 2.9% decrease in energy prices.

Consumer Sentiment: Consumer sentiment was up 1.1 points to 98.0 in the first reading of April, besting consensus estimates. The assessment of current conditions is up two points to 115.2, the highest number in 17 years. Analysts believe this means consumers will spend more in April. Expectations for the future were also up 0.4 points to 86.9, which means confidence in the jobs outlook. Inflation expectations were unchanged at 2.5% over the next year and 2.4% over the next five years. The survey notes that Republicans and Democrats are in lockstep on current conditions, but they vary widely on the future. Many Republicans reportedly think things will improve, while Democrats appear at the other end of the spectrum.

Consumer Price Index (CPI): Echoing the weak producer inflation numbers, consumer inflation was down 0.3% in March. Prices are up 2.4% overall on the year. When food and energy are taken out, prices fell just 0.1% and they’ve risen 2.0% on the year. Energy prices were down 3.2% and gasoline was down 6.2%. Communications were down 3.5% as the cost of cell phone plans fell. Apparel prices were down 0.7% with transportation costs falling 1.4% due to lower vehicle prices. Housing and medical costs were up only 0.1%, respectively.

Retail Sales: Retail sales were down 0.2% in the month of March. Much of this has to do with a 1.2% drop in vehicle sales. When cars and trucks were taken out, sales were flat. Gas prices were also down 1.0%, so when those categories were removed, sales were up 0.1%. Sporting goods sales were down 0.8% and furniture sales were down 0.3%. Less people were eating out, as restaurant sales fell 0.6%. Demand for building materials was also down, falling 1.5%. There was a 2.6% gain in electronics and appliances. General merchandise was up 0.3%.

Mortgage News

Despite the Federal Reserve raising short-term interest rates, mortgage rates have continued to drop over the past few weeks due to economic uncertainty. No one knows how long that will remain the case, so it’s a great time to lock your rate if you’re in the market.

This week, 30-year fixed-rate mortgages (FRMs) averaged 4.08% with an average 0.5 point for the week ending April 13, 2017, down from last week when they averaged 4.10%. A year ago at this time, 30-year FRMs averaged 3.58%.

In the shorter-term, 15-year FRMs this week averaged 3.34% with an average 0.5 point, down from last week when they averaged 3.36%. A year ago at this time, 15-year FRMs averaged 2.86%.

Finally, 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.18% this week with an average 0.4 point, down from last week when they averaged 3.19%. A year ago, 5-year ARMs averaged 2.84%.

Stock Market

Stocks tend to hate geopolitical risk, so when President Donald Trump dropped what’s been nicknamed “the mother of all bombs” on a reported ISIS hideout in Afghanistan, stocks closed at session lows to end the shortened week.

The Dow Jones Industrial Average was down 138.61 points Friday and 0.98% over the last five days. It finished Thursday at 20,453.25. Meanwhile, the S&P 500 fell 15.98 points to close at 2,328.95, down 1.13% on the week. Finally, the NASDAQ was down 1.24% for the week after closing at 5,805.15, down 31.01 points.

The Week Ahead

Monday, April 17

Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey where respondents from the organization are asked to rate the general economy and housing market conditions. The 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, April 18

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.

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.

Wednesday, April 19

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, April 20

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, April 21

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

Lots of key housing data is coming out next week. We’ll have it all covered.

If all of this mortgage and economic news isn’t enough to make you emerge from your Peeps-induced sugar crash, we’ve got plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. We should probably do one last public service announcement that if you live in the U.S., your taxes are due tomorrow. Hopefully, about 99% of you have your taxes done already, but that doesn’t mean you can’t get in the spirit. Check out some of the weirdest tax deductions. Enjoy your week, everyone!

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