|For the Week Ending October 20, 2017|
Please enjoy this quick update on what happened this week in the housing and financial markets.
Housing Market Index:
In a nice turnaround, home builders are once again very bullish on the housing market. In the latest data, which is released by The National Association of Home Builders from their member survey, the index jumped four points all the way back up to 68. The strength in the index is optimism of future sales along with continuing growth of current sales. Traffic continues to be lower than builders would like, however the only component that seems to be missing is first time buyers. Existing home owners and previous owners make up the bulk of the traffic and purchases of new construction.
Mortgage Rates and Applications:
Mortgage rates remained essentially flat for the week ending October 13th, however applications for purchases and refinances increased. Purchase application rose a seasonally adjusted 4.0 percent. Refinances went up by 3.0 percent. Purchase applications continue to make up more than 50% of all loan activity, and remain higher from the same time last year by 9.0 percent.
The latest news for new housing is mixed. Permits for single-family construction rose 2.4 percent to an annualized rate of 819,000. Permit activity for this market segment is up 9.3 percent from the same time last year. Single family activity is the major component in which the strength of housing is judged. This is translating into more available inventory which will likely continue to support housing growth in the coming months.
The weakness in the latest report is permits for multi-family units. Here we see that permits have declined by 16.1 percent to a rate of 396,000. This is a whopping 24.0 percent below activity at the same time last year.
Industrial production was essentially flat for the month of September. With only a .3 percent growth, this continues to create uncertainty for the Fed in deciding what action to take on interest rates in the coming months.
One of the things that creates questions about this latest report is that the private reports by Empire State and ISM show significant manufacturing growth.
Next week’s potential market moving reports are:
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.
|Recently released economic data shows the economy is growing, but inflation is still not a problem. Rising inflation pressures mortgage rates to move higher.|
|The Fed is expected to leave policy rates unchanged at this month’s meeting but raise them at December’s meeting, despite lack of inflation.|
|Unemployment benefit claims fell to a 44-year low last week. This points to a rebound in job growth after a hurricane-related decline in September.|
|Builder confidence in the housing market rose to a 5-month high in October. However, builders still face increased material costs and labor shortages.|
|Housing starts were at a 1-year low in September, due to hurricanes disrupting construction. The storms are also blamed for a decline in building permits.|
|Housing market fundamentals, however, remain solid. Mortgage applications for home purchases were up 4% week-over-week, despite the holiday week.|
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Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
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