Market Update - Quicken Loans Zing Blog

It’s a big week in economic news with retail sales, a couple of production numbers and inflation data all hitting this week. Let’s get right into it.

Headline News

Quicken Loans Home Price Perception Index (HPPI): Appraiser opinions were 2.17% below those of homeowners in March. This is 0.18% below where it was at this time in February. Turning to the regional data, homeowners in the West are closest to par, coming in 1.92% above appraiser opinion. It’s followed by the South and Midwest at 2.14% and 2.20% overvalued, respectively. Finally, the Northeast brings up the rear at 2.36%.

Quicken Loans Home Value Index (HVI): Home values were up 0.29% in the month of March and 4.77% over the previous year. In the regional data, the West leads the way up 1.52% for the month and 7.43% on the year. Southern home values were up 0.32% and 3.75% annually. In the Midwest and South, values were down 0.67% and 0.76%, respectively. That said, they’re 2.75% and 1.36% on the year.

MBA Mortgage Applications: Total applications were up 10.0% over last week. This is due to an 8.0% increase in purchases and an 11.0% increase in refinance. The average rate on a 30-year fixed-rate mortgage is down four basis points to 3.82%.

Retail Sales: Retail sales were down 0.3% in March. A big reason for the drop was a decline of 2.1% in auto sales. When you subtract cars and trucks, sales are up 0.2%. It’s up 0.1% without cars and gas, as gas prices actually were up 0.9% in March. Retail sales are up 1.7% on the year. Sales are up 1.8%, excluding automobiles. It’s worth noting that both of these readings are down from the pace set in February. Turning to individual categories, there were declines in restaurant spending as well as at apparel and department stores. The good news is building materials were up 1.4% and there was increased spending on health and personal care.

Producer Price Index (PPI): Producer prices are down 0.1% as currency continued to deflate around the globe in March. They’re also down 0.1% for the year. Prices taking out food and energy are down 0.1% as well, but they remain 1% higher on the year. Meanwhile, if you further take out trade services, prices were flat and are up 0.9% annually. Energy prices were up 1.8% on the month, but are still down 13.8% since last March. There was also a 0.2% drop in services demand.

Consumer Price Index (CPI): Prices were up 0.1% for the month of March. This puts them up 0.9% for the year. The monthly change was still 0.1% when food and energy were taken out of the equation. However, the two categories have generally held inflation down. It’s at 2.2% when those two categories are taken out. Housing was only up 0.1%, held down by a 1.8% decline in the cost of hotels. There was a 0.2% gain in rent which is fairly low. There was a matching drop in the cost of meat and vegetables. Apparel was also down 1.1% after a 1.6% gain last month medical care also rose 0.1%.

Jobless Claims: Jobless claims fell 13,000 to 253,000 this week. This is the second time in the last month or so that claims have been down to levels not seen since 1973. The four-week average is down 1,500 to 265,000. On the continuing claims side, they’re down 18,000 to come in at 2.171 million. The four-week average is down 10,000 to 2.178 million.

Industrial Production: Industrial production fell 0.6% and manufacturing was down 0.3% in the month of March. Manufacturing of vehicles was down 1.6% due to weaker sales in recent weeks. Capacity utilization is also down 0.5% to 74.8%. Utilities were also down 1.2% as was mining, which fell 2.9%.

Consumer Sentiment: Consumer sentiment fell 1.3 points to 89.7. Expectations were down 1.9 points to 79.6. There were doubts over future job prospects. Current conditions is down 0.2 points to 105.4. Long-term inflation expectations are down 0.2% with the five-year outlook sitting at 2.5%. Expectations over the next year remain at 2.7%.

Mortgage News

Fixed rates are the lowest they’ve been at any point in 2016.

30-year fixed-rate mortgages (FRMs) averaged 3.58% with an average 0.5 point for the week ending April 14, 2016, down from last week when they averaged 3.59%. A year ago at this time, 30-year FRMs averaged 3.67%.

15-year FRMs this week averaged 2.86% with an average 0.5 point, down from last week when they averaged 2.88%. A year ago at this time, 15-year FRMs averaged 2.94%.

5-year Treasury-indexed hybrid adjustable rate mortgage (ARMs) averaged 2.84% this week with an average 0.4 point, up from last week when they averaged 2.82%. A year ago, 5-year ARMs averaged 2.88%.

Stock Market

Oil prices fell before a weekend meeting of the world’s big oil producers. This dragged stocks lower.

The Dow Jones Industrial Average was down 28.97 points on Friday to close at 17,897.46. The good news is it was 1.82% higher for the week. The S&P 500 had a 1.62% weekly gain after losing 2.05 points Friday to close at 2,080.73. The NASDAQ was down 7.67 points to 4938.22, but it was up 1.80% for the week.

The Week Ahead

Monday, April 18

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, April 19

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, April 20

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.

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.

Thursday, April 21

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.

It’s an easy-going week on the economic front, but we do get some housing data. We’re not just markets and mortgages, though. We have plenty of home, money and lifestyle content that you can use. Subscribe to the Zing Blog below.

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