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Mortgage applications were up in this week’s Markets in a Minute!

Mortgage applications were up in this week’s Markets in a Minute!
January 26, 2018 Fred Kreger




For the Week Ending January 26, 2018

The Government and the Economy:

Thankfully the government shutdown did not last past Monday. The irony is that the American public has become immune to almost anything that happens in Washington, or the world for that matter. The government shuts down, and the average person on the street just goes about their business with little thought about it. North Korea fires a missile, and the response is “oh another one” (greeted with a yawn). Bitcoin loses 50% of its value in a week, “whatever”. The more I think about it, the scarier it is what we don’t pay attention to anymore. The good thing, is you are paying attention to this newsletter.


The Federal Housing Finance Agency House Price Index (FHFA):

Home prices continue to rise, and November’s 0.4 percent increase was well received. Prices from the same time last year are higher by 6.5 percent. These solid gains come on the heels of the revised increase of 0.6 percent for October. With the housing market gaining 7.0 percent in 2017, and the belief that growth will continue well into 2018, more and more buyers are jumping into the market. Even Millennials, who have represented a small percentage of home buyers, are increasing their interest in homeownership. This is placing even more strain on housing inventory and is likely to push the rate of appreciation even higher in the coming months.


Existing Home Sales:

My comment about pressure on home prices due to inventory shortages is verified by the latest existing home sales report. The December numbers show sales fell 3.6 percent to an annualized rate of 5.570 million. November was very strong with a rate of 5.780 million, which is the highest number since the home purchase expansion after the housing meltdown in 2008. Home supply is the only reason for the decline in this data. Supply dropped 11.4 percent all the way down to 1.480 million homes. Translation…this is a 3.2 month’s supply, which is 3 tenths less than November.


New home Sales:

The 9.3 percent decline in December new home sales is very deceiving. This decline is actually the fourth best rate of new home sales since the recession. The decline appeared because the prior month was actually the strongest reading since the 2008 housing crisis. Supply of new homes is fairing slightly better than existing homes sales with inventory at a supply rate of 5.7 months.


Next week’s potential market moving reports are:

• Tuesday January 30th – S&P Corelogic Case-Shiller Home Price Index, Consumer Confidence
• Wednesday January 31st – MBA Mortgage Applications, ADP Employment Report, Pending Home Sales, FOMC Meeting Announcement
• Thursday February 1st – First Time Jobless Claims, Construction Spending
• Friday February 2nd – National Employment Situation, Factory Orders, Consumer Sentiment


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 government shutdown had a nominal effect on markets and no effect on rates. Another shutdown is possible February 8th, the new deadline for a deal.
The dollar slumped this week, its biggest weekly decline in 18 months. Treasury Secretary Steven Mnuchin says a weaker dollar could boost U.S. trade though.
Jobless claims were up from last week’s 45-year low, but still lower than expected. The labor market continues to tighten with near full employment.


Existing home sales were down 3.6% in December from November, but were up 1.1% year-over-year. A lack of supply of homes on the market played a role.
New home sales were also down in December, blamed partly on unseasonably cold temperatures. However, new home sales were 14% higher than a year ago.
Rising mortgage rates have spurred more buyers off their couches and into the market. Mortgage applications were up 4.5% over last week, 6.1% over last year.

To steal ideas from one person is plagiarism. To steal from many is research.


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



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