Market Update - Quicken Loans Zing Blog

There’s not too much data out this week, so we decided to fill the void with some of our own housing numbers. Hope you brought your appetite! Let’s get started.

Headline News

Quicken Loans Home Price Perception Index (HPPI): The gap between homeowner and appraiser opinion of home value closed from 2.17% to 1.95% in April. Homeowners in the West were closest, overestimating their home value by 1.66%. In the South, that gap is 1.95%. Midwestern homeowners were 2.11% high with their estimates, followed closely by Northeastern homeowners at 2.13%. At the metro level, San Jose, Calif. homeowners continue to have the most underestimated home values at 3.56%. Meanwhile, Philadelphians overestimate value by 3.46%. Homeowners in San Diego came closest to the bull’s-eye, underestimating values by just 0.01%.

Quicken Loans Home Value Index (HVI): Home values were down 0.66% nationwide in April. That being said, they’re up 3.79% on the year. The major reason for the drop was a 1.72% decrease in the West. There were gains in all other regions. The Midwest was up 0.57%, with the Northeast on its heels at 0.55%. The South came in at 0.34%.

MBA Mortgage Applications: Mortgage applications were up 0.4% this week as the average rate on a 30-year mortgage dropped by five basis points to 3.82%. Purchase applications were up 0.4% and refinance applications moved up 0.5%.

Jobless Claims: It was a bad week on the employment front as an initial claims were up 20,000 to come in at 294,000, the highest since February. The four-week average is up 10,250 at 268,250. Continuing claims were also 37,000 jobs higher, coming in at 2.161 million. In the one positive for this report, the four-week average for continuing claims is down 4,000 to 2.137 million.

Retail Sales: Retail sales beat all expectations, coming in 1.3% higher. A big part of this was that auto sales are up 3.2%. When you take cars out of the equation, sales are up 0.8%. Unfortunately for our wallets, oil was also at 2.2% and the gain was 0.6% when cars and gas are both removed from the picture. In other areas, apparel was up as were restaurants. Building materials and garden equipment were down, which is admittedly a little strange considering it started warming up in April. Total sales are up 3.0% on the year.

Producer Price Index (PPI): Producer prices were up 0.2% in April. This brings them flat with where they were last year. If you take out food and energy, they’re up 0.1% and 0.9% on the year. Further removing trade services, prices are 0.3% and 0.9% annually. Despite higher oil prices, energy prices weren’t up that much, only 0.2%.

Consumer Sentiment: Consumer sentiment rose 6.8 points in its first reading for May to 95.8. Expectations were up almost 10 points to 87.5. Current conditions is also up nearly two points to 108.6. The one-year inflation outlook is down 0.3% to 2.5%. Meanwhile, five-year expectations are up 0.1% to 2.6%.

Mortgage News

The treasury rate was down last week as a result of lackluster April employment data. This had a positive effect on mortgage rates which were down across the board.

Thirty-year fixed-rate mortgages (FRMs) averaged 3.57% with an average 0.5 point for the week ending May 12, 2016, down from last week when they averaged 3.61%. A year ago at this time, 30-year FRMs averaged 3.85%.

Fifteen-year FRMs this week averaged 2.81% with an average 0.5 point, down from last week when they averaged 2.86%. A year ago at this time, 15-year FRMs averaged 3.07%.

Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.78% this week with an average 0.5 point, down from last week when they averaged 2.80%. A year ago, 5-year ARMs averaged 2.89%.

Stock Market

The stock market is feeling the effects of a poor earnings season as the Dow Jones Industrial Average and the S&P 500 posted their first three-week losing streak since January.

The Dow was down 185.18 points Friday to close at 17,535.32, losing 1.16% for the week. The S&P dropped 0.52% since last Friday after falling 17.62 points to finish the day at 2,046.49. The NASDAQ was down 19.66 points to close at 4,717.68. This is down 0.39% on the week.

The Week Ahead

Monday, May 16

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, May 17

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.

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, May 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.

Thursday, May 19

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, May 20

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.

It’s a pretty solid week of economic data, and we’ll have it all here on the Zing Blog. Before you think we’re all members and mortgages, we have home, money and life content in abundance. By subscribing below you’ll never miss a post.

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