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Market Update - Quicken Loans Zing Blog

With the markets closed for Columbus Day on Monday, the week of economic data got off to a fairly slow start. Quicken Loans did release some housing data on Tuesday and things picked up with retail sales and producer prices to end the week.

Headline News

Quicken Loans Home Price Perception Index (HPPI): Homeowners were closer to what appraisers thought their homes were worth in September. They were just 1.26% high when estimating value as opposed to 1.56% in August. In the West, homeowners were only off by 0.73% while in the Northeast, the gap is 1.50%. Western markets do have the fastest rate of property appreciation going. Nationwide, 13 of the 27 metro areas surveyed had higher property values than homeowners anticipated.

Quicken Loans Home Value Index (HVI): Home values were down 0.28%. They’re still up 7.78% year-over-year. Homeowners in both the West and South saw values go up by 0.31%. Values in the Midwest and Northeast are cooling as temperatures fall, down 2.23% and 1.42% respectively.

MBA Mortgage Applications: Overall applications were down 6.0% as refinance inquiries fell 8.0% and purchase apps were down 3.0%. The average rate on a 30-year-fixed mortgage went up six basis points to 3.68%.

Jobless Claims: Initial claims were unchanged this week after having been revised down to 246,000 the previous week. The four-week moving average was down 3,500 to 249,250. Continuing claims were down 16,000 to 2.046 million. The four-week average was down 24,750 to come in at 2.070 million.

Producer Price Index (PPI): Producer prices were up 0.3% in September and have risen 0.7% on a yearly basis. Part of this increase is attributable to a rise in food and energy prices. The index is up 0.2% when these are taken out. This particular metric is at 1.2% on the year. If you further take out trade services, the number jumps back up 0.3% and 1.5% on the year. This points to weakness in the trade services portion. Goods prices were up 0.7% including an 11% rise in vegetable prices that caused a 0.6% rise in food costs. Service costs are only up 0.1%.

Retail Sales: Retail sales were up 0.6% in September. Taking out cars from the equation, the number is 0.5%. Gas prices also contributed to this. Sales were up only 0.3% when cars and gas were removed. Breaking this out, auto sales were up 1.1%. Other areas of strength included restaurants, up 0.8%. Furniture was up 1.0% and building materials and garden equipment sales were up 1.4%. Both developments are good signs for housing.

Consumer Sentiment: The midmonth rating for consumer sentiment wasn’t great, down 3.3 points to come in at 87.9. The expectations rating is down more than six points, coming in at 76.6. However, there is a 1.3 point uptick in current conditions tied to stronger consumer spending in October. One year inflation expectations are unchanged at 2.4%.

Mortgage News

Mortgage rates were up across the board last week. That said, rates are still in a pretty good position and very low. It remains a great time to lock in.

30-year fixed-rate mortgages (FRMs) averaged 3.47% with an average 0.6 point for the week ending October 13, 2016, up from last week when they averaged 3.42%. A year ago at this time, 30-year FRMs averaged 3.82%.

15-year FRMs this week averaged 2.76% with an average 0.6 point, up from last week when they averaged 2.72%. A year ago at this time, 15-year FRMs averaged 3.03%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.82% this week with an average 0.4 point, up from last week when they averaged 2.80%. A year ago, 5-year ARMs averaged 2.88%.

Stock Market

Stocks were slightly higher Friday as investors saw positive economic data and took in the comments of members of the Federal Reserve regarding long-term economic expectations. That said, it was a fairly lackluster week in the markets.

The Dow Jones industrial average finished the week up 39.44 points to close at 18,138.38 points. It was down 0.56% for the week. On the S&P 500, things were pretty flat as the index was up only 0.43 points to finish at 2,132.98. It was down 0.96% for the week. Activity was similarly low on the NASDAQ with the index up just 0.83 points to finish at 5,214.16. Even this can be considered a bit of a bounce back with the index otherwise being down 1.48% since the previous week.

The Week Ahead

Monday, October 17

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.

Tuesday, October 18

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 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.

Wednesday, October 19

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

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.

Thursday, October 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.

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.

A few meaningful reports are coming out as far as the broader economy next week and plenty of housing data. We’ll have it all, but if mortgages and economics aren’t your personal ideas of a Monday afternoon delight, we have lots of home, money and lifestyle content to get your week off to a great start. Subscribe to the Zing Blog below.

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