I may have just gotten back from vacation, but my alarm going off at 6:00 a.m. does have a way of snapping you back into reality very quickly. While I was gone, the beat was going on in the rest of the world.
We’ve got lots of important economic data while I was in Indianapolis. Let’s jump into it!
MBA Mortgage Applications
Applications were up 4.2% last week as purchase applications increased 3% and refinance applications were up 6%.
The rate on the average 30-year-fixed conforming mortgage was flat at 4.81% for the week. Mortgage applications are still heavily weighted towards purchase and the refinance share of that was up 1.1% to 38.7% overall.
Existing Home Sales
The news wasn’t so rosy for existing home sales in July. Sales fell 0.7% to 5.34 million on a seasonally-adjusted annual basis. Sales are down 1.5% on the year.
The sales of single-family homes were down 0.2% and have fallen 1.2% annually, coming in at a rate of 4.75 million. Meanwhile, at 590,000, condo sales are down 4.8% in July and 3.3% on the year. Supply in the market has also decreased, down 0.5% to 1.920 million. However, because sales fell, supply relative to sales remains flat at 4.3 months.
Finally, prices were down 1.5% on the month to settle at $269,600, still increasing 4.5% annually.
New claims for unemployment came in at 210,000 for the week, down 2,000 from the week prior. The four-week moving average of initial claims was down 1,750 to come in at 213,750.
Continuing claims were also down 2,000, falling to 1.727 million. Meanwhile, the four-week moving average was down 5,000, dropping to 1.735 million.
FHFA House Price Index
Prices were up 0.2% in the month of June. Prices are up 6.5% on the year. That annual rate is down from 6.7% in May.
The West South Central region was up only 0.1% and up 5.1% on the year at the low-end. Meanwhile, the Mountain region was up 0.7% and has an annual gain of 9.6%.
New Home Sales
New home sales were down 11,000 to come in at a seasonally-adjusted annualized rate of 627,000 in July. The good news is that June was revised slightly higher. May was revised down in a bit of an offset.
Supply was up 2% and totaled 309,000 homes on the market. Supply relative to sales was up to 5.9 months, indicating a market nearly in balance between buyers and sellers.
Prices were up exactly 6% to a median of $328,700, only up 1.8% on the year. Sales are up more than 18% in the West and Midwest as well as over 17% in the South. However, sales are down almost 50% in the Northeast.
Durable Goods Orders
New orders for durable goods were down 1.7% for July. The loss is attributable to the transportation category. When this is taken out, orders rose 0.2% monthly. In addition, orders of core capital goods were up 1.4%.
Orders for commercial aircraft were down 35.4%. There are big swings in this category. The downturn obscures an uptick in motor vehicle orders at 15.3%.
Computers and electronics, as well as machinery had a strong month in July. There was a 1.3% increase in overall durable goods inventory. However, part of the reason for this was that shipments were down 0.2%, which may be partly blamed on a truck driver shortage.
Mortgage rates were down to the lowest level they’ve been at sense mid-April. It’s a great time to lock your rate whether you’re in the market to buy or refinance.
To begin, 30-year fixed-rate mortgages averaged 4.51% with 0.5 points in fees last week, down two basis points from the previous week. This is up from 3.86% at the same time last year.
Looking at shorter terms, the average rate on a 15-year fixed-rate mortgage with 0.5 points came in at 3.98%, falling for 4.01% the prior week. This is up from 3.16% a year ago.
Rates for a 5-year treasury-indexed hybrid adjustable-rate mortgage (ARM) were down five basis points to 3.82% with 0.3 points. This is up from 3.17% last year.
The Nasdaq and the S&P 500 both hit record highs. Netflix hit its highest point ever and was a big reason for the huge advance. Analysts see a bright future for the company because it’s had strong performance in international markets.
Did you have Netflix in our Fantasy Stock League? If you did, odds are you were rewarded in your portfolio. The market had a good week in general. My portfolio is up over 12.0% since the game started. I’m playing for pride, but you can still get in the game for cash prizes!
The Dow Jones industrial average finished up 0.47% on the week at 25,790.35 after gaining 133.37 points Friday. The S&P 500 was up 17.71 points to finish at 2,874.69. This was an increase of 0.86% on the week. Finally, the Nasdaq finished at a record high of 7,945.98 points, up 67.52 points on the day and 1.66% for the week.
The Week Ahead
Tuesday, August 28
International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.
Wednesday, August 29
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.
Gross Domestic Product (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.
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, August 30
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.
Personal Income and Outlays (8:30 a.m. ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.
Friday, August 31
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.
Next week is shorter because of Labor Day, but there’s still a ton of important data, including GDP and personal incomes. Market Update will be out Tuesday next week because we have Labor Day off, but we’ll have it all covered.
Labor Day unfortunately marks the unofficial end of summer, which means it’s a good time to start thinking about fall home maintenance. Check out our seasonal maintenance guide. Have a great week!
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