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Market Update - Quicken Loans Zing Blog

Headline News

Housing Market Index: Home builder confidence in the housing market fell three points to 58 in this month’s numbers. The current sales metric is down three points to 65. Meanwhile, traffic of prospective buyers in new homes is down five points to 39. The contraction in this measurement continues to deepen. In one positive, futures sales are up one point at 65. Turning to regional data, all four quadrants of the country took a hit. The West was down five points at 68. Meanwhile, the South and Midwest are both at 57. The Northeast continues to bring up the rear, down two points to 45.

MBA Mortgage Applications: Purchase applications fell 4.0% last week, but refinance applications were up 16.0% as rates just keep falling. They can’t get much lower than this. The average rate for a 30-year conforming loan was down eight basis points to 3.83%.

Housing Starts: Builders started fewer houses than expected in January, down 3.8% to an annual rate of 1.099 million. Single-family homes are down 3.9% to 731,000 annually, and multi-family homes are down 3.7% to come in at 368,000. Meanwhile, permits were down 1.6% to 720,000 on the single-family side and multi-family permits were up 2.1% to 482,000. The 1.202 million permit total is still down 0.2% on the month.

Producer Price Index (PPI): Producer prices were up 0.1% in January, but are still down 0.2% annually. Meanwhile, taking out food and energy, prices are up 0.4%. Gasoline is down 15.7% and home heating oil is down 43.3% with the mild winter. Services are also on the rise.

Industrial Production: Industrial production was up 0.9% in January as there was a 2.8% surge in the production of motor vehicles. This helped drive manufacturing up 0.5% overall. Meanwhile, factories were utilizing more of their capacity as this is up to 77.1% from 76.4%. Mining has been hit by low energy prices and was flat for the month as it sits down 9.8% on the year. Capital goods manufacturing was also up 0.3%. Despite the strong month, industrial production remains down 0.7% on the year.

Jobless Claims: Initial claims were down 7,000 this week to 262,000. The four-week average is down 8,000 to 273,250. The news wasn’t all good as continuing claims were up 30,000 to 2.273 million. The four-week average is 14,000 higher at 2.263 million.

Consumer Price Index (CPI): Prices were flat this month, but in core categories they were up 0.3%. Prices are up 1.4% on the year. Certain sectors had stronger rises, with medical care up 0.5%. Prescription drugs also rose by the same amount. The price of travel lodging was also up 2.0%. The cost of shelter was up 0.3% overall. Other key sectors seeing rises included new and used vehicles, up 0.3% and 0.1%, respectively. Energy prices were a big drag on the numbers as energy fell 2.8% with a 4.8% drop in the price of gas. Food prices were unchanged.

Mortgage News

Fixed rates were unchanged this week.

30-year fixed-rate mortgages (FRMs) averaged 3.65% with an average 0.5 point for the week ending February 18, 2016, unchanged from last week. A year ago at this time, 30-year FRMs averaged 3.76%.

15-year FRMs this week averaged 2.95% with an average 0.5 point, unchanged from last week. A year ago at this time, 15-year FRMs averaged 3.05%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.85% this week with an average 0.4 point, up from last week when they averaged 2.83%. A year ago, 5-year ARMs averaged 2.97%.

Stock Market

Stocks were mixed even as oil was down 3.7% Friday. Some are taking this as a positive, pointing out that stocks are holding their ground despite oil for once. In fact, the market posted its best week yet for 2016.

The Dow Jones Industrial Average was down 21.44 points Friday to close at 16,391.99. Despite this, it was up 2.62% for the week. The S&P 500 basically didn’t move, down 0.05 points to 1,917.78. The NASDAQ was up 16.89 points to 4,504.43 and rose 3.85% since last Friday.

The Week Ahead

Tuesday, February 23

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.

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.

Wednesday, February 24

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.

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.

Thursday, February 25

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

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, February 26

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.

Personal Income and Outlays (8:30 a.m. ET) – This measures all possible income sources as well as expenditures of the public.

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 a few big economic releases are on the way next week. We’ll be here to cover it all, but we’re more than economic releases and mortgage news. Subscribe to the Zing Blog below for tips on home, money and life. Have a great week!

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