Housing Starts in December surged, Manufacturing activity in Philadelphia region rose, Mortgage rates continued to edge lower this week
January 19, 2017
The Commerce Department reported on Thursday that Housing Starts in December surged 11.3% from November to an annualized rate of 1.226 million units, above the 1.193 million expected. The numbers signal that the pull back in November from the nine-year high in October could have been an anomaly. Within the report it revealed that multi-family dwellings rebounded in December, while single-family starts were modestly lower. For all of 2016, Housing Starts of 1.17 million units were the best since 2007 due in part to a strong labor market and rising wages.
Manufacturing activity in the Philadelphia region rose in January as general activity, new orders and the employment components all increased during the month. Within the report it showed that manufactures have grown more optimistic in their forecasts over the past two months. The Philadelphia Fed Index rose to 23.6 in January from the revised 19.7 in December and well above the 15.3 expected. In addition, firms’ optimism about future manufacturing growth continued to improve this month.
Mortgage rates continued to edge lower this week after the surge in rates, which occurred soon after the presidential election results in early November. The 30-year fixed conventional mortgage rate ($424,000 or less) hit a multi-year high of 4.32% on December 29 of 2016, up from 3.54% on November 3. This week, the rate fell to 4.09% with 0.5 in points and fees, down from 4.12% in the previous week. To put it in historical perspective, mortgage rates were near 19% back in the early 1980s.
