Market Update - Quicken Loans Zing Blog

There wasn’t a whole lot happening on the economic calendar before Friday last week when we got retail sales and producer prices. Let’s get you all the information you need.

Headline News

MBA Mortgage Applications: Rates on the 30-year fixed-rate mortgage were down seven basis points to 4.32% and the improvement showed in terms of mortgage applications. Purchase applications were up 6.0%, while the refinance applications index climbed 4.0% for an overall increase of 5.8% on the week.

Jobless Claims: Initial jobless claims came in at 247,000. While this is an increase of 10,000 on the week, the number came in below expectations. Meanwhile, the four-week moving average of initial claims is down 1,750 at 256,500. Continuing claims were down 29,000 to 2.087 million. This number matches the four-week average which was up 16,500.

Producer Price Index (PPI): Food prices were up 0.7% in December, which helped push producer prices up 0.3% for the month. Energy prices were also up 2.6% on a 7.8% uptick in the price of gasoline. Energy prices are up 5.9% annually. This pushes the yearly change rate for this index up 1.6%. When food and energy are taken out, it’s up 0.2% in December and 1.6% on the year. Meanwhile, trade services were up 0.2%. If food, energy and trade services are all taken away, prices were only up 0.1% on the month and 1.7% on the year.

Retail Sales: Retail sales were up 0.6% in December, but that number is a little deceiving. Vehicle sales were up 2.4%, but when you take cars out of the equation, they’re up only 0.2% on the month. Sales are flat if you take out gasoline as well. Restaurant sales were also down 0.8%, which is a sign people don’t have as much free money to spend after paying the bills. Despite it being a big season for gifts, sales were down 0.6% in December in department stores. Electronic and appliance sales were down 0.5%.

Consumer Sentiment: In its initial January reading, the consumer sentiment index was down 0.1 points to 98.1. The current conditions portion of the index is up 0.6 points to 112.5, while expectations for the future are down by the same amount, coming in at 88.9. In one good sign for potential increased spending in the future, consumers expect inflation to rise. The one-year outlook is up 0.4% to 2.6%. Meanwhile, the five-year inflation expectations are up 0.2% to 2.5%.

Mortgage Rates

Rates were down across the board in Freddie Mac data last week as the market digested a so-so December employment report. We’re getting a bit of a reprieve from higher rates, so it’s a great time to lock your rate if you’re looking to buy or refinance.

Thirty-year fixed-rate mortgages (FRMs) averaged 4.12% with an average 0.5 point for the week ending January 12, 2017, down from last week when they averaged 4.20%. A year ago at this time, 30-year FRMs averaged 3.92%.

Fifteen-year FRMs this week averaged 3.37% with an average 0.5 point, down from last week when they averaged 3.44%. A year ago at this time, 15-year FRMs averaged 3.19%.

Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.23% this week with an average 0.5 point, down from last week when they averaged 3.33%. A year ago, 5-year ARMs averaged 3.01%.

Stock Market

A good quarter from U.S. banks meant a good Friday for most of Wall Street. That said, Walmart pushed the Dow Jones Industrial Average lower with its losses.

The Dow was down 5.27 points Friday to finish at 19,885.73. This was down 0.01% on the week. The S&P 500 was up 0.25% on the week after gaining 4.20 points on the day to close at 2,274.64. The NASDAQ finished at 5,574.12, up 0.76% on the week and 26.63 points on the day.

The Week Ahead

Wednesday, January 18

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.

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.

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.

Thursday, January 19

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.

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.

We finally have our first big economic data week of the year. I’d like to think you’re all as excited as I am, but if this doesn’t really get you amped up and ready to roll, we’ve got plenty of home, money and lifestyle content that we can’t wait to share with you if you subscribe to the Zing Blog below.

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