Market UpdateHeadline News

Quicken Loans HPPI: Homeowners continued to overvalue their homes in October, but the gap is narrowing down to 1.98% from 2% in September. Looking at regional data, the gap is largest in the Northeast, where homeowners think their homes are worth 2.17% more than appraisers do. In the Midwest, the difference is 2.16%, and in the South, it’s 1.92%. Homeowners in the West overvalue their homes by 1.74%. Homeowners in San Diego knew exactly what their property value was. Meanwhile homeowners in San Jose, CA overestimated their property value by 5.10%. Philadelphia homeowners overestimated their property value by 3.63%.

Quicken Loans HVI: Home values were up 1.07% in October, and they’re up 4.01% since the same time last year. The Northeast led the value gains, up 1.94%. The Midwest increased 0.92%, followed by the South, which was up 0.55%. Rounding out the regional data, the West was up 0.49%.

MBA Mortgage Applications: Mortgage applications were down 1.3% last week after the announcement that the Federal Reserve word strongly consider raising rates in December. The fact that they called out the possibility drove the average rate on a 30-year-fixed loan up 11 basis points to 4.12%. Purchases were up 0.1%, while refinances were down 2.0% on the week.

Jobless Claims: Initial claims were unchanged this week at 276,000. The four-week moving average is up 5,000, coming in at 267,750. Continuing claims also barely moved, up 5,000 to 2.174 million. The four-week average of continuing claims was up 2,250, coming in at 2.165 million.

Producer Price Index (PPI): Producer prices were down 0.4% month to month in October. Prices were down 1.6% for the year without food and energy; prices were down 0.3% and only up 0.1% for the year. Going further and taking out trade, prices were down 0.1% for the month. These were up 0.4% for the year. Much of the price decreases come from energy which is down 21.5% year-over-year. Food prices fell 0.8% in October for a 4.2% year-over-year decline.

Retail Sales: Retail sales were up only 0.1% in October. Expectations had been for a 0.3% increase. If you take out auto sales, the numbers were up 0.2%. Lower gas prices also contributed to the downward pull. Sales were up 0.3% when not accounting for cars and gas. Furniture and building materials are up in a good sign for the housing market. Also showing gains are garden materials and restaurants. A laundry list of items declined, including electronics and appliance stores, grocery stores and general merchandise sales. Apparel sales were unchanged for the month. In a positive, department stores made gains.

Consumer Sentiment: Consumer sentiment rose 3.1 points to 93.1 in its midmonth reading for November. This is the highest reading since July. Americans are more positive on the outlook for jobs and a bit more optimistic about the stock market, as expectations are up 3.5 points to 86.5. Current conditions are up 2.5 points to 104.8, as people really like where the job market is right now. Meanwhile, inflation expectations are beginning to move lower in the short term as Americans only anticipate prices will rise 2.5% over the next year. This probably has something to do with weak inflation caused partly by a drop in gas prices. Five-year expectations for inflation are holding steady at 2.5%.

Mortgage News

Mortgage rates were up across the board again last week following an unexpectedly strong employment report.

30-year fixed-rate mortgages (FRMs) averaged 3.98% with an average 0.6 point for the week ending November 12, 2015, up from last week when they averaged 3.87%. A year ago at this time, 30-year FRMs averaged 4.01%.

15-year FRMs this week averaged 3.20% with an average 0.6 point, up from last week when they averaged 3.09%. A year ago at this time, 15-year FRMs averaged 3.20%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.03% this week with an average 0.4 point, up from last week when they averaged 2.96%. A year ago, 5-year ARMs averaged 3.02%.

1-year Treasury-indexed ARMs averaged 2.65% this week with an average 0.2 point, up from 2.62% last week. At this time last year, 1-year ARMs averaged 2.43%.

Stock Market

Stocks were down Friday and had an off week, as investors are worried about declining prices in commodities and how that will play out with an impending move from the Fed to raise short-term interest rates.

The Dow Jones Industrial Average was down 202.83 points on Friday, closing at 17,245.24. It lost 3.71% for the week. The S&P 500 lost 22.93 points Friday to close at 2,023.04, down 3.63% since last week’s closing bell. The NASDAQ had the worst week of all, down 4.26% including a 77.20 point drop on Friday down to 4,927.88. Collectively, stocks had their worst week since August.

The Week Ahead

Tuesday, November 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.

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.

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.

Wednesday, November 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.

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, November 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.

Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.

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