I hope everyone had a good Memorial Day. Sadly, even the long weekends must eventually come to an end.
I hope you’re all rested up because there was a fair amount of economic data that came out last week. Let’s jump into it.
Headline News
MBA Mortgage Applications
Mortgage applications were down 2.6% on a seasonally adjusted basis last week. Mortgage rates increased from 4.77% to 4.86%, on average, for a 30-year-fixed conforming mortgage, which didn’t help.
Refinance applications were down 4.0% and represent just 35.7% of total applications. At the same time, purchase applications were down 2.0%.
New Home Sales
Sales of single-family homes were down just 1.5%, a lower decrease than expected in April. They came in at a seasonally adjusted annual rate of 662,000 units. Unfortunately, numbers for March were also revised down to 672,000 units after being first estimated at 694,000 units sold.
The median sales price was down 7.93% on the month to come in at $312,400. Meanwhile, the average supply in the market did increase to 5.4 months at the current pace of sales from 5.2 months in March.
Jobless Claims
Initial jobless claims were up 11,000 to 234,000 last week. This pushed the four-week moving average up 6,250 to come in at 219,750.
The report notes that the claims collection process in Puerto Rico and the Virgin Islands is still not back to where it should be.
On the continuing claims side, these are up 29,000 to come in at 1.741 million. The four-week average was down 23,250 to come in at 1.752 million.
FHFA House Price Index
Home prices were only up 0.1% in March. The annual rate of home price appreciation still remains at 6.7%, but this is a significant slowing from February.
Home prices actually dropped in New England, East South Central, West South Central and the Pacific. They only rose a little bit in other regions.
Existing Home Sales
Existing home sales were down 2.5% in April to come in at a seasonally adjusted annualized rate of 5.46 million. This is 1.4% below where they were a year ago.
The slowing of sales is blamed primarily on low housing inventory. Although slower sales did push inventory up 9.8% in April and from 3.6 months to 4.0 months, at the current pace of sales, there’s still not enough to go around, and it’s a seller’s market.
The median sales price did increase to $257,900, which is up 5.4% on the year. The average time on the market decreased from 30 days to 26 days.
In terms of regional breakdowns, the Midwest was unchanged, while all other regions saw sales fall anywhere from 2.9% to 4.4%.
Durable Goods Orders
Durable goods orders were down 1.7% overall. Transportation equipment orders fell 6.1%, and this had a lot to do with it.
However, orders for core capital goods were up 1.0% after dropping 0.9% last month. Shipments of these items were also up 0.8%.
Among the big gainer categories were orders of electrical equipment, appliances and components, which were up 2.6%. Orders of computers and other electronics were up 1.1%, with fabricated models rising 2.0%. Orders of transportation equipment may have been down, but motor vehicle and parts orders were up 1.8% in April. A downturn in aircraft orders made the overall number weaker.
Orders for machinery were down 0.8%.
Consumer Sentiment
In the final reading of May, consumer sentiment was down to an even 98. Economists had expected it to remain at 98.8, the number from April.
Consumers are anticipating smaller income gains than last year. Still, it’s only down from 101.4 in March, which was the highest reading since 2004.
Mortgage Rates
Mortgage rates are continuing to rise steadily. If you’re in the market to buy or refinance and you see a rate you like, it’s probably a pretty good idea to lock your rate at the moment.
The average rate on a 30-year-fixed mortgage was up five basis points to 4.66%, with 0.4 points in fees. This is up from 3.95% at this time a year ago.
In shorter terms, the rate on a 15-year-fixed mortgage was up seven basis points to 4.15% with 0.4 points. Last year, the rate was 3.19%.
The average rate on a 5-year treasury-indexed hybrid adjustable rate mortgage came in at five basis points to 3.7% with 0.3 points. This is up from 3.07% in May of last year.
Stock Market
So we’ve got something kind of cool that I wanted to mention. Have you ever wondered how you would do if you had your own stock portfolio and could invest in whatever you wanted? Now you’ve got your chance.
Zing Blog is starting its own fantasy stock league contest. Here’s how it works.
Everyone starts out with $10,000 in play money, and you’ll be able to complete stock trades using real market data. The trader whose portfolio has the highest percentage gains by December 31 will win the $2,500 grand prize. If you get in late, don’t worry. There are $500 prizes for the trader with the largest gains every 60 days.
Being that I’m employed here, I can’t win, but many other Quicken Loans team members and I are playing for fun. My username is goldengraham, and I just started trading on Friday, so we’ll see how this goes. Warren Buffett says to invest in what you know, so I’m doing tech stocks like Apple, Google and Tesla to start. Best of luck, and let’s have some fun!
With the contest, I thought it would be fun to take a look at top-performing stocks every week. This being the first week, let’s just take a look at some numbers for the year. On the Dow Jones industrial average, Boeing has been the top programming stock, followed by Intel, Nike, Visa and Microsoft.
Strong earnings propelled another solid week in the overall markets. The Dow was up 0.15% on the week after finishing down 58.67 points Friday to close at 24,753.09. On the S&P 500, the index was down 6.43 points Friday to close at 2,721.33, up 0.31% weekly. Finally, the Nasdaq finished at 7,433.85, up 9.43 points on the day and 1.08% on the week.
The Week Ahead
Tuesday, May 29
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, May 30
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.
Gross Domestic Product (GDP) (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.
International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.
Thursday, May 31
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.
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.
Pending Home Sales Index (10:00 a.m. ET) – The National Association of REALTORS® developed the Pending Home Sales Index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.
Friday, June 1
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.
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.
This may be a short week, but it’s not short on economic data. We’ll have it all covered for you in next Monday’s Market Update.
If mortgage and economic news aren’t really your thing, we’ve got plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. On that note, in the world of internet holidays for everything, tomorrow is Senior Health and Fitness Day. In that spirit, here’s a post on workout plans for all ages. Have a great week!
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