Quicken Loans HPPI/HVI: The opinion gap between homeowners and appraisers on property value is widening, up almost a full point in July. According to last week’s survey, homeowners think their homes are worth 2.33% more than actual appraised values. In addition to this, the gap is above 2% in all regions of the country. Meanwhile, home values dropped 0.27% in the U.S. last month, but the number is small enough that it just indicates prices held steady. Prices are up 3.89% on the year. The West saw the slightest of gains as prices were up 0.07%. It remains the fastest growing market with values up 6.30% for the year. The South was flat for the month. Meanwhile, the Northeast and Midwest saw value drops of 0.60% and 0.69%, respectively.
MBA Mortgage Applications: Purchase applications were down 4.0% for the week, but they’re up 20% from this time last year. Meanwhile, refinances were up 3.0% to reach levels that haven’t been seen since May. The average interest rate for a 30-year fixed mortgage remained at 4.13%.
Jobless Claims: Initial claims were up 5,000 this week to 274,000, a number that’s still historically low. The four-week average was down 1,750 to 266,250. Even with the rise, levels are still 15,000 below where they were at this time last month. Continuing claims were up 15,000 last week, coming in at 2.273 million. Meanwhile, the four-week average was up 14,000 to 2.254 million. That’s 10,000 lower than this time a month ago.
Retail Sales: Retail sales were up 0.6% in July. The numbers for both May and June were revised for the better as well. Vehicle sales had a big rebound last month as they were up 1.4% after falling 1.5% in June. Retail sales excluding vehicles and gas were up 0.4%. Restaurant sales were up 0.7% in another highlight.
Producer Price Index (PPI): Producer prices were up 0.2% in July due to a rise in the cost of trade services. Year on year, prices actually went down a little further, declining 0.8% since last July. Excluding food and energy, prices were up 0.3%. Energy prices were down 0.6% due to high oil supply. The price of finished goods was down 0.1%. However, car prices are up 0.6%.
Industrial Production: Production was up 0.6% in July, led by a 10.6% surge in motor vehicle sales. Manufacturing increased 0.8%, largely because of auto manufacturing. Business equipment was just 0.1% higher. Capacity utilization was up 0.3% to 78.0%
Consumer Sentiment: Consumer sentiment was down two tenths of a point, coming in at 92.9 in its mid-August reading. The current conditions component moved just slightly, settling at 107.2, a good sign for consumer spending. The expectations component was down slightly to 83.8. Inflation expectations are pretty much holding steady at 2.8% over the next year and 2.7% over the next five years.
Rates mostly pushed higher this week, according to Freddie Mac.
30-year fixed-rate mortgages (FRMs) averaged 3.94% with an average 0.6 point for the week ending August 13, 2015, up from last week when they averaged 3.91%. A year ago at this time, 30-year FRMs averaged 4.12%.
15-year FRMs this week averaged 3.17% with an average 0.6 point, up from last week when they averaged 3.13%. A year ago at this time, 15-year FRMs averaged 3.24%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.93% this week with an average 0.5 point, down from last week when they averaged 2.95%. A year ago, 5-year ARMs averaged 2.97%.
1-year Treasury-indexed ARMs averaged 2.62% this week with an average 0.3 point, up from last week when they averaged 2.54%. At this time last year, 1-year ARMs averaged 2.36%.
Stocks ended the week on a high note as European leaders agreed to a new bailout package for Greece. The focus is now expected to be on the Fed and when it will raise short-term interest rates.
The Dow Jones Industrial Average finished the week up 69.15 points to close at 17,477.40, a 0.60% weekly gain. On the S&P 500, investors saw the index rise 8.15 points to close at 2,091.54. This is a weekly gain of 0.67%. The NASDAQ closed the week up 14.68 points to 5,048.24, finishing the week up 0.09%.
The Week Ahead
Monday, August 17
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.
Tuesday, August 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.
Wednesday, August 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.
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.
Thursday, August 20
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.
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.
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