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Spending was up but inflation wasn’t in this week’s Markets in a Minute!

Spending was up but inflation wasn’t in this week’s Markets in a Minute!
August 4, 2017 Fred Kreger

 

 

For the Week Ending August 4, 2017

Pending Home Sales

After three consecutive monthly declines, the pending home sales index turned around and jumped by a much stronger than anticipated 1.5 percent in the month of June. The housing market struggled through the Spring
season but the latest data shows promise for the existing home sales data coming in later this month. With mortgage rates continuing to remain low, this holds promise that the second-half of the year can end up being a much stronger housing market than normal.

 

Mortgage Bankers Association Loan Application Weekly Data

With mortgage rates remaining steady for the week, applications for purchases and refinances declined slightly. The seasonally adjusted move in activity were purchase applications went down by 2.0 percent whereas
refi’s dropped by 4.0 percent. Overall the purchase index is up by 9.0 percent from the same time last year. Purchase applications represent 55.5 percent of loan activity according to the Mortgage Bankers Association.

 

Construction Spending

Surprisingly, the June construction spending report declined 1.3 percent. This is a reversal from the prior month’s revised increase of 0.3 percent. It appears that spending in this sector moved in a similar fashion
to the latest data in personal income and outlays released on Tuesday morning.

 

Single-family residential construction spending increased 0.3 percent. Multi-family headed in the opposite direction with a decline of 0.2 percent. When looking at the latest data, it is always important to note
that the bulk of the weight is placed on the single-family sector as that is a much closer measure to how the housing market is performing. Year on year growth for single-family construction spending is up 9.0 percent. Multi-family spending is higher by only
0.6 percent.

 

First Time Jobless Claims, Factory Orders, Manufacturing

Even with the seasonal retooling in the automotive industry, first time jobless claims remain extremely low at only 240,000 for the week ending July 29th. Typically for this time of year, a jump in claims is seen
with auto-manufacturers laying off workers while they retool their assembly plants for the change in car model year.

 

Factory orders jumped 3.0 percent for June. Higher than expected aircraft orders played a major role in the increase. Manufacturing continues to show great strength with a reading of 56.3.

 

Next week’s potential market moving reports are:

• Monday August 7th – Labor Market Conditions Index
• Tuesday August 2nd – Job Openings and Labor Turnover Report (JOLTS)
• Wednesday August 3rd – MBA Mortgage Applications
• Thursday August 4th – First Time Jobless Claims, Producer Price Index
• Friday August 5th – Consumer Price Index

 

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.

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

Consumer spending rose slightly in June, but there was little sign of inflation as personal consumption expenditures barely moved. No inflation is good for
rates.
The already strong labor market continues to tighten, with fewer jobless claims and layoffs last week. Claims have now been below 300,000 for 126 weeks.
Construction spending fell unexpectedly in June, mainly due to a drop in public projects. Private residential construction was down only 0.2% in June.

 

Mortgage applications fell slightly this week, down 2.8%. However, purchase applications were 9% higher than the same week a year ago.
Pending home sales were up in June, after 3 straight monthly declines. NAR’s Pending Home Sales Index jumped 1.5%, double economists’ expectations.
The housing market remains constrained by a shortage of properties for sale. Homebuilders struggle to fill the gap, citing higher costs and labor shortages.

To the optimist, the glass is half full.

To the pessimist, the glass is half empty.

To the underwriter, it doesn’t really matter. You just need to provide the receipt for when you bought the glass.

 

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
rate trends can differ from our own and are subject to change at any time.

Sincerely,

Fred Kreger
American Family Funding
Certified Mortgage Consultant
NLMS # 1850 / 214640 BRE# 01215943 / 01371184
(661) 505-4311
Fred.Kreger@affloans.com
28368 Constellation Road
Suite 398
Santa Clarita, CA
91355

www.fredkreger.com

©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

 

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