Quicken Loans HPPI/HVI: Homeowners overrated their properties by 2.65% in August, according to the Home Price Perception Index. This is the seventh straight month the chasm has continued to widen. The gap was more than 2.3% in all regions of the country. Home values were pretty flat, declining 0.05% for the month. The Northeast saw a value decline, but all other regions rose slightly. Despite the lack of movement this month, prices are up 3.24% on the year.
MBA Mortgage Applications: Mortgage applications were down 6.2% last week as rates ticked up slightly. Purchase applications were down 1%, but refinances saw a 10% fall. The interest rate on a 30-year fixed mortgage bumped up two basis points to 4.10%.
Jobless Claims: Initial claims were down 6,000 this week, coming in at 275,000. This put the four-week average of 275,750. It’s 5,000 more than this time a month ago. Continuing claims are up 1,000, coming in at 2.260 million. This is in lockstep with the four-week average which came in at the same number after falling 5,000 this week.
Producer Price Index (PPI): The demand for goods and services from producers was unchanged in August. Total demand is down 0.8% for the year. Without food and energy, demand was up 0.3%. The food and energy sectors are really keeping prices down at this point, as prices are up 0.9% on a yearly basis if you take out these two categories. Demand was 0.1% higher when you also take out trade services. Apparel and shoes were higher, as well as natural gas and fruits.
Consumer Sentiment: Sentiment dropped 6.2 points in the first reading of September to 85.7. It’s the lowest it’s been since last year. Expectations are down over seven points to 76.4. Consumers see a weakening outlook on jobs. Current conditions are down almost 5 points to 100.3, the weakest reading for that metric since October. Consumers’ expectations for the inflation rate increase ticked slightly higher, coming in at 2.9% over the next year and 2.8% over the next five years.
Neither fixed nor adjustable rates moved very much this week.
30-year fixed-rate mortgages (FRMs) averaged 3.90% with an average 0.6 point for the week ending September 10, 2015, up from last week when they averaged 3.89%. A year ago at this time, 30-year FRMs averaged 4.12%.
15-year FRMs this week averaged 3.10% with an average 0.7 point, up from last week when they averaged 3.09%. A year ago at this time, 15-year FRMs averaged 3.26%.
5-year Treasury-indexed hybrid adjustable rate mortgage (ARMs) averaged 2.91% this week with an average 0.5 point, down from last week when they averaged 2.93%. A year ago, 5-year ARMs averaged 2.99%.
1-year Treasury-indexed ARMs averaged 2.63% this week with an average 0.3 point, up from last week when they averaged 2.62%. At this time last year, 1-year ARMs averaged 2.45%.
Stocks were up on Friday as investors wait see what the Federal Reserve is going to do with short-term interest rates. The Fed meets on Wednesday and Thursday of this week. Officials may decide now is the right time to roll out a rate hike they’ve been hinting at for a while. If they do, it’ll be the first rate increase since June 2006.
The Dow Jones Industrial Average was up 102.69 points Friday to close at 16,433.09. This is a 2.05% increase on the week. The S&P 500 also had a good week, gaining 2.07% after picking up 8.76 points on Friday to close at 1,961.05. The NASDAQ experienced the biggest weekly boost, gaining 26.09 points on Friday to close at 4,822.34, an increase of 2.96% from the previous Friday.
The Week Ahead
Tuesday, September 15
Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are measured by retail and food services stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.
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.
Wednesday, September 16
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.
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.
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.
Thursday, September 17
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.
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