Market UpdateHeadline News

Housing Market Index: Home-builder sentiment is unchanged in January, coming in at 60. Meanwhile, the level in December was revised down one point from 61. Much of the weakness is in the traffic component that measures how many buyers are coming through new houses. It’s down two points to 44. Current sales are doing fairly well, up two points to 67. Future sales expectations are still very strong at 63, but this is down three points and the lowest reading since May. The West is the strongest regional market at 73, followed by the South at 60 and the Midwest at 58. The market for new homes is shrinking in the Northeast at 47.

MBA Mortgage Applications: Applications were up 9.0% overall as refinances saw a 19.0% rise from last week driven by a drop in rates. This overcame a 2.0% drop in purchases. The average rate for a 30-year, conforming mortgage was down six basis points to 4.06%.

Consumer Price Index (CPI): Prices were down 0.1% in December and they’re up only 0.7% since this time last year. A lot of this is being caused by a continuing drop in energy prices which were down 2.4% again in December and are down 12.6% on the year. Food prices were also down 0.2% last month. When you take out food and energy, prices are actually up 0.1% on the month and 2.1% on the year. Still, this falls well below the Federal Reserve’s 2% overall inflation target. Costs for housing and medical care rose, but they were up only 0.1% each.

Housing Starts: Starts came in down 2.5% in December to a seasonally adjusted annual rate of 1.149 million. Starts are still up 6.4% since this time last year. There were 768,000 single-family starts, a number that’s down 3.3% from November. Multi-family starts were down 1.0% to 381,000. On the permit side, they came in at 1.232 million. This is down 3.9% for the month, but they’re up 14.4% for the year. Permits in multi-family homes were down 11.4%, coming in at 492,000. The single-family home permits were up 1.8% to 740,000.

Jobless Claims: Initial claims were up 10,000 to come in at 293,000. This is the highest reading since July. This drove the four-week average up 6,500 to 285,000. Continuing claims, however, were down 56,000 to 2.21 million. The four-week average of continuing claims is up to 3,250 to come in at 2.23 million.

Existing Home Sales: Existing home sales rose 14.7% in the month of December to a seasonally adjusted annual rate of 5.460 million. Sales are up 7.7% on the year. Single-family homes are leading the way with a 16.1% gain to 4.2 million. They’re up 7.1% on the year. Meanwhile, multi-family homes were up to 640,000 in December, a gain of 4.9% for the month and 12.3% for the year. The supply of existing homes on the market fell quite a bit, down to 3.9 months from 5.1 months in November. The average price for an existing home was up 1.9% to $224,100, a 7.6% gain for the year.

Mortgage News

Mortgage rates were down across the board last week reflecting more turmoil in the markets and a rush to the safety of bonds.

30-year fixed-rate mortgages (FRMs) averaged 3.81% with an average 0.6 point for the week ending January 21, 2016, down from last week when they averaged 3.92%. A year ago at this time, 30-year FRMs averaged 3.63%.

15-year FRMs this week averaged 3.10% with an average 0.5 point, down from 3.19% last week. A year ago at this time, 15-year FRMs averaged 2.93%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.91% this week with an average 0.5 point, down from last week when they averaged 3.01%. A year ago, 5-year ARMs averaged 2.83%.

Stock Market

The price of a barrel of oil was up $2.66 Friday, its biggest one-day gain since August. Although this might hurt a little bit at the gas pump, it helped stop the bleeding in stocks which had their first positive week of 2016. Your 401(k) recovered a little bit after looking like it went 15 rounds with Muhammad Ali in his prime.

The Dow Jones Industrial Average was up 210.83 points Friday to close at 16,093.51. It was up 0.66% for the week. Meanwhile, the S&P 500 was up 37.91 points to 1,906.90, up 1.41% for the week. The NASDAQ had the biggest weekly gain at 2.29% after finishing Friday up 119.12 points at 4,591.18.

The Week Ahead

Tuesday, January 26

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

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.

Wednesday, January 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.

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, January 28

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.

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.

Friday, January 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.

Looks like a pretty packed week of data and we can’t wait to cover it for you. We’re not just economics and mortgage, though. The Zing Blog prides itself on giving you awesome tips for your home, money and life. If you want to check it all out, you can subscribe to the blog below.

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