Hopefully, you all had a good weekend! It’s not Halloween yet, but my Detroit Lions certainly experienced their fair share of red zone horrors last night. There’s always next week, I suppose.
The stock market had a much better performance last week. There’s that and plenty of economic data. Let’s jump right in.
Headline News
MBA Mortgage Applications
Mortgage applications were down 4.6% overall last week. Purchase applications fell 6.0%, and applications to refinance were down 3.0%. The average rate on a 30-year fixed conforming mortgage was up four basis points to 4.18%.
Durable Goods Orders
New orders of durable goods rose 2.2% for the month of September and are up 8.3% on the year. A big part of the games was an increase of 64% in commercial aircraft orders. When transportation is taken out, they were up 0.7% and 7.5% yearly.
Core capital goods saw a 1.3% increase and a 7.8% yearly gain. Shipments are up 0.7% as well. Inventories were up 0.6%, while unfilled orders rose 0.2%.
One slight downside is that vehicle orders were down. The effects of hurricane season couldn’t be accurately measured.
FHFA House Price Index
Homes with loans backed by Fannie Mae and Freddie Mac saw their prices increase 0.7% in August. They’ve risen 6.6% on the year, near their highest level in four years. July numbers were also revised higher, to a 0.4% gain.
Regionally, the Pacific has a 9.3% annual gain. The Mountain region follows with an 8.3% yearly increase. Homes in the Mid-Atlantic have seen the smallest yearly appreciation, but they’re still up 5.0%.
New Home Sales
New home sales rose 18.9% in September to a seasonally adjusted annualized rate of 667,000. It’s worth noting that this report does tend to be very up and down. There was also a very slight upward revision to August numbers.
Surprisingly, sales rose 26% in the South despite the hurricanes. Sales also went up 33% to a rate of 48,000 in the Northeast while being up 11% in the Midwest and 2.9% in the West.
The number of new homes on the market was unchanged at 279,000, while the surge in sales made supply relative to the current sales amount fall one month to 5.0 months.
Sellers weren’t giving homes away, either. The median sales price was up 5.2% to $319,700. However, prices are only up 1.6% on the year.
International Trade in Goods
The U.S. goods gap increased by $800 million to $64.1 billion. This was higher than consensus estimates, which had the number at $63.9 billion. On the import side, they rose 0.9%. There were increased capital goods imports, as well as increases in industrial supplies and food products from overseas.
Exports were up 0.7%. Exports of industrial supplies were up, while exports of capital and consumer goods both fell along with vehicles.
Jobless Claims
Initial claims did rise 10,000 last week to 233,000. However, some of this is being blamed on Hurricane Maria’s effect on Puerto Rico. The four-week average fell 9,000 to 239,500.
Continuing claims were down 3,000 to 1.893 million. The four-week average was down 4,500 to around 1.904 million.
Pending Home Sales Index
The National Association of REALTORS® Pending Home Sales Index showed that the number of existing homes under contract for sale was flat on the month at an index level of 106.0 in September.
Sales in the South were down, falling 2.3% in the second straight decline, likely due to hurricane effects. However, sales in all regions are down on the year. In the Northeast, they’ve fallen 2.4%, and that’s where they’ve been best. Sales with a purchase agreement in place are down 3.5% annually.
Gross Domestic Product (GDP)
The economy grew at a rate of 3.0% in the first reading of the third quarter. Transportation shipping delays may have increased third-quarter inventories. These inventory increases added 0.73% to GDP. Personal consumption expenditures increased 2.4% and contributed 1.62% to overall GDP. Durable goods spending was up 8.3% by itself. Nonresidential investment was up 3.9%. The nation’s trade deficit fell by $20 billion to $595.5 billion.
On the downside, residential investment did fall 6.0% in one of the few weak areas. The GDP inflation metric shows prices rising 2.2% on a seasonally adjusted annual basis.
Consumer Sentiment
Consumer sentiment fell 0.4 points in the final reading of October, but it’s still holding strong at 100.7. Expectations are up 6.1 points from September, coming in at 90.5. Meanwhile, the current conditions index is up 4.8 points from last month to 116.5.
There have been gains in personal income as well as home and stock values. This has contributed to economic optimism. However, inflation expectations are still very low at 2.4% over the next year and 2.5% over the next five years.
Mortgage Rates
Average mortgage rates were higher last week following movements in the bond market. That said, it’s still a great time to lock a low rate if you’re in the market to purchase or refinance a home.
The average rate on a 30-year fixed mortgage with 0.5 points in fees is 3.94%, up six basis points from the previous week. A year ago at this time, the average rate was 3.47%.
Turning to shorter terms, the average 15-year fixed mortgage rate was 3.25% with 0.5 points, up six basis points from the week prior. At this time last year, the average rate was 2.78%.
On the adjustable rate side, the rate on a 5-year ARM averaged 3.21% for 0.4 points, up four basis points. At the same time last year, the average rate was 2.84%.
Stock Market
It was a huge week for tech earnings. Amazon led the way, with its stock rising 13.2%, but Microsoft and Alphabet, the parent company of Google, also had big weeks.
The Dow Jones industrial average was up 0.45% on the week after gaining 33.33 points on the day to close at 23,434.19.
The S&P 500 closed at a new record level of 2,581.07. This was up 20.67 points on the day and 0.23% on the week.
Finally, the NASDAQ also had a record day, rising 144.49 point on the day and 1.09% on the week. It closed at 6,701.26.
The Week Ahead
Monday, October 30
Personal Income and Outlays (8:30 AM ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.
Tuesday, October 31
S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller Home Pricing Index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.
Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.
Wednesday, November 1
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
ISM Manufacturing Index (10:00 a.m.) – This index measures the general direction of manufacturing within the U.S. The qualitative survey of purchasing managers looks at production, new orders, order backlogs, inventories and supplier deliveries, among other factors.
Thursday, November 2
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, November 3
Employment Situation (8:30 a.m. ET) – The employment situation report measures unemployment in the labor force as well as the sentiments of workers about the job market.
International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings.
Employment situation is always a big deal in terms of economic reports because it shows the overall health of job market. We also get some key data on manufacturing and incomes, so it’s a pretty jam-packed week coming up. We’ll have it all next week.
We understand that mortgage rates and economic data can be a bit of a bore at times. If you need more of a jolt to get your day going we’ve got plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. As our countdown to Halloween comes to a close, let’s check out the true story behind a tale that still sends a chill down many a spine – “the Legend of Sleepy Hollow.” Have a spook-tacular week!
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