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Market Update - Quicken Loans Zing Blog

It’s a pretty light week in terms of economic data, but we do have some housing numbers. Otherwise, the stock market is pretty much in control. Let’s dive in.

Headline News

Housing Market Index: Growth in the housing market remains solid as this index of home builders is down one point at 59 in July. Current sales came in at 63, while there is a three-point drop in future sales at 66. Traffic is still very weak, coming in at 45. This indicates there is very little foot traffic going through new homes. The west remains the most prosperous region for new home activity, coming in at 70. The South is 10 points back at 60. The Midwest is at 56 and the Northeast is at 42. The Northeast is the most developed market in housing, so this is to be expected.

Housing Starts: Starts were up 4.8% in June to a seasonally adjusted annualized rate of 1.189 million. Starts on the single-family side were up 4.4%, with starts from multi-family homes being up 5.4%. Permits were up 1.5% to 1.153 million. Single-family permits were up 1.0%. Meanwhile, multi-family permits rose 2.5%.

MBA Mortgage Applications: Rates ticked up last week with the average 30-year fixed mortgage rate rising five basis points to a still very low 3.65%. Purchases were down 2.0% and refinances were down 1.0% as overall applications fell 1.3% overall.

Jobless Claims: Initial claims fell by 1,000 jobs this week to 253,000. The four-week moving average is at 257,750, falling 1,250. The current operating theory is that the usual layoffs for retooling that car companies do when they switch over to produce the new model haven’t occurred. Continuing claims are also down 25,000 at 2.128 million. The four-week average is down 3,000 to come in at 2.141 million.

FHFA House Price Index: Home prices were up 0.2% in May for a year-to-year gain of 5.6%. Yearly growth is slowing as this number is down 0.3% from April. New England was down 1.3% on the month and has gained only 3.9% on the year. Meanwhile, the Mountain region was up 1.2% for an 8.5% annual gain. The Pacific region was down a bit, but is still up 7.9% on the year.

Existing Home Sales: Existing home sales were up 60,000, or 1.1%, in June to 5.570 million on a seasonally adjusted basis. Digging deeper, single-family sales were up 0.8% for a 3.1% gain on the year and condos were up 3.2% for a 1.6% yearly gain. Overall, sales are up 3.0% annually. Prices were also up 3.7% to $247,700. In a negative, supply relative to sales fell to 4.6 months from 4.7 months.

Mortgage News

Mortgage rates have continued to settle higher as the market is coming to terms with the implications of Brexit. Rates are still extremely low if you’re in the market for a mortgage. Now’s the time to move before rates climb further.

Thirty-year fixed-rate mortgages (FRMs) averaged 3.45% with an average 0.5 point for the week ending July 21, 2016, up from last week when they averaged 3.42%. A year ago at this time, 30-year FRMs averaged 4.04%.

Fifteen-year FRMs this week averaged 2.75% with an average 0.5 point, up from last week when they averaged 2.72%. A year ago at this time, 15-year FRMs averaged 3.21%.

Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.78% this week with an average 0.5 point, up from last week when they averaged 2.76%. A year ago, 5-year ARMs averaged 2.97%.

Stock Market

The market was driven higher Friday on mixed earnings data with no other economic reports. IBM and Microsoft posted good earnings, while GE reported a 2% drop in orders.

The Dow Jones Industrial Average was up 53.62 points Friday to close the 18,570.85. It was up 0.29% for the week. Meanwhile, the S&P 500 finished Friday at 9.86 points and had a 0.61% weekly change after finishing Friday at 2,175.03. The NASDAQ closed the week up 26.26 points to 5,100.16. It had a big gain of 1.40% for the week.

The Week Ahead

Tuesday, July 26

S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller home pricing index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.

Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.

New Home Sales (10:00 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month.

Wednesday, July 27

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.

Durable Goods Orders (8:30 a.m. ET) – Durable goods orders are based on new orders placed with domestic manufacturers for factory hard goods.

Pending Home Sales Index (10:00 a.m. ET) – The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.

Thursday, July 28

International Trade in Goods (8:30 a.m. ET) – The Census Bureau’s Bureau of Economic Analysis has begun breaking out the goods from the rest of international trade numbers to get an idea of import and export estimates for GDP calculations.

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, July 29

GDP (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.

Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.

It looks like we’ve got quite a few economic reports on the docket for next week. We’ll have it all covered right here. If economics and mortgage don’t really get the juices flowing for you, we have plenty of home, money on lifestyle content for you to keep up with throughout the week. Subscribe to the Zing Blog below.

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