New Home Sales December, Apple, Mortgage Applications Rise
January 27, 2016
Wednesday – January 27
The Commerce Department reported on Wednesday that December New Home Sales surged 10.8% from November to an annual rate of 544,000 units, above the 506,000 expected. It was third consecutive monthly gain and the third best annual gain since 2008. Sales rose 14.5% in 2015 to 501,000 due to increased confidence in potential home buyers, a strengthening labor market along with low mortgage rates. New Home Sales are based upon the following definition: “A sale of the new house occurs with the signing of a sales contract or the acceptance of a deposit.” The house can be in any stage of construction: not yet started, under construction, or already completed.
Shares of Apple Inc. are falling in today’s trading after a sobering report on its iPhone sales. The popular smart-phone has seen sales grow at their slowest pace since the introduction to the iPhone in 2007. The company also stated that revenues in the current quarter are expected to decline for the first time in 13 years, signaling the stratospheric growth may be cooling. Apple went on to say that the strong dollar and slowing global growth are the reasons behind the decline in sales. In addition, China, its largest overseas market, has begun to show “signs of economic softness” in the past few months.
Mortgage application volume rose for the third straight week in the latest survey as mortgage rates continue to hover just above all-time low levels. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total mortgage loan application volume, rose 8.8% from one week earlier. The refinance index gained 11%, while the purchase index increased 5%. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) reached its lowest level since October 2015, dropping to 4.02%, from 4.06%. Also falling, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.89% from 3.93%.