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Strong housing and a growing economy in this week’s Markets in a Minute!

Strong housing and a growing economy in this week’s Markets in a Minute!
November 17, 2017 Fred Kreger



For the Week Ending November 17, 2017

Stock Markets:

In what has seemed like forever that elected officials have talked about revamping the outdated and often considered absurd tax code, change may finally be coming. On Thursday House Republicans passed their version
of the tax code revisions. By no means does this represent that the tax code will change, however it is a big first step, and a milestone in the road to change. There are many more steps to the tax code being changed, that had eluded Congress for decades.
The Dow Jones Industrial Average soared almost 200 points on this news. The other major indices were up significantly as well.


Housing Market Index:

Home builders are reporting that they are seeing an increase in activity. In fact, builders are saying that this is the best market since March. Current and future sales are coming in at a very strong level of 77.
Traffic to home building sites is also up by 2 points for the best reading since May. It is uncommon for this time of year to see significant increases in activity, so this is welcome news for the housing market.


Mortgage Rates and Applications:

Purchase applications rose 0.4 percent for the week ending November 10th. Refinance applications, despite mortgage rates remaining relatively flat, rose 6.0 percent for the week. What is exciting in the latest report
is that purchase applications are 17.0 percent higher than the same time last year. The strong year-on-year gain of purchase applications points to future strength in underlying home sales.



On the wholesale level, pressure for price increases showed signs of life for the month of October. The Producer Price Index rose by a larger than expected 0.4 percent. Even when you remove volatile food and energy
prices, wholesale inflation remained at 0.4 percent.

On the retail end, unfortunately the story was not the same. Consumer prices for October were up slightly by 0.1 percent. The year-on-year rate was actually down by 2 tenths of a percent. The core rate of inflation
was up only 0.2 percent when food and energy prices were removed from the calculation.


Next week’s potential market moving reports are:

• Monday November 20th – Leading Indicators
• Tuesday November 21st – Existing Home Sales
• Wednesday November 22nd – MBA Mortgage Applications, Jobless Claims
• Thursday November 23rd – Markets Closed
• Friday November 24th – NYSE Closes at 1:00PM


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.



The Producer Price Index, which measures wholesale inflation, rose 0.4% in October. Core PPI was also up, supporting a Fed rate increase next month.
Retail sales were also improved in October, coming in stronger than expected. The increase of 0.2% signals a growing economy and could pressure rates.
Tax reform continues to make progress in both chambers of Congress. Once passed, the reform is expected to spur further economic growth.


Home builder confidence hit an 8-month high in November, despite increased costs and labor shortages. Buyer demand remains high on reduced inventory.
National mortgage delinquency rates continue to fall, down 0.6% year-over-year in August. Foreclosure inventory was also down 0.3% year-over-year.
The House passed legislation to extend the National Flood Insurance Program for 5 years. However, the Senate still must approve the bill for it to take effect.

I had a job tying sausages together, but I couldn’t make ends meet. 


Please note: We will not publish The Markets in a Minute next week. Wishing you a wonderful Thanksgiving Day!


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.


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



©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
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