Hurricanes put a dent in hew home construction, Single family housing starts fell, mortgage rates unchanged

October 18, 2017

Hurricanes Harvey and Irma put a dent in new home construction in Florida and southern Texas. The Commerce Department reported that total September Housing Starts fell 4.7% from August to an annual rate of 1.127 million units versus the 1.160 million expected. It was the lowest level since September 2016; however, from September 2016 to September 2017, starts were up 6.1%.

Single family Housing Starts fell 4.6% percent from August, although they were up 5.9% from September 2016. Multi-dwelling starts with five or more units, saw a drop of 6.2% from August and a 7.9% rise over September 2016. Overall, the South saw a 9.3% decline in September, while gains were seen in the Northeast, Midwest and West. Building Permits, a sign of future construction, fell 4.5% from August to an annual rate of 1.215 million units, just below the 1.225 million expected.

Mortgage rates were essentially unchanged in the latest week as reported by the Mortgage bankers Associaiton (MBA). The 30-year fixed-rate mortgage with conforming loan balances ($424,100 or less) decreased to 4.14% from 4.16%, with points remaining unchanged at 0.44. The MBA’s Market Composite Index, a measure of total mortgage loan application volume, rose 3.6% in the latest week. The refinance index rose 3%, while the purchase index was up 4%.

Mortgage Calculator Showing Purchase Of Home Loan

Read More

Housing Market Index, US Stocks closed at record high levels yesterday, UK Consumer Price Index

October 17, 2017

Homebuilder sentiment pushed higher in October as builders rebounded from the initial shock of the hurricanes. The NAHB Housing Market Index rose 4 points in October to 68, above the 64 expected and up from 64 in September. The report showed that the component gauging current sales conditions rose 5 points to 75 and the index measuring sales expectations in the next six months increased 5 points to 78. Meanwhile, the component measuring buyer traffic ticked up a single point to 48. “It is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer,” said NAHB Chief Economist Robert Dietz.

U.S. Stocks closed at record high levels yesterday. The Dow closed at 22,956.96; S&P 500 at 2,557.64; while the tech-heavy NASDAQ closed at 6,624.00. The new mantra for Stocks, “buy high and sell higher.” Equities can’t continue this blistering pace, there has to be some sort of correction. The S&P is currently trading near unchanged this morning while the Dow hit 23,000 for the first time ever.

The United Kingdom (U.K.) Consumer Price Index hit 3% in September, the highest since March 2012. This is important to watch as low inflation around the globe has been a major tailwind for higher Bond prices and lower yields for a long time. The rise in U.K. inflation comes after Fed Chair Yellen said on Sunday that she expects inflation to bounce back soon. At the moment, the Core Personal Consumption Expenditure, the Fed’s favorite inflation gauge, is running at 1.3% year over year, way below the 2% the Fed is looking for. So, persistently low inflation here in the U.S. remains a “mystery” and is a major reason why long-term Bond yields are so low.

House Symbols Displaying Houses Or Homes For Sale

Read More

Regional Manufacturing data from NY, US Economy bright, Citigroup mortgage originations decline

October 16, 2017

Regional manufacturing data from New York State surged in October due in part to strong gains in employment, new orders and shipments. The Empire State Index jumped to 30.2 in October, well above the 20.0 expected and well above the 24.4 recorded in September, the highest in three years. Looking ahead, firms are optimistic about upcoming conditions as future business, new orders and employment are expected to increase.

At an international banking seminar on Sunday, Fed Chair Yellen said that the outlook looks bright for the U.S. economy and for inflation prospects in coming months; this is weighing on Bond prices this morning. Ms. Yellen was speaking “Economic activity in the United States has been growing moderately so far this year, and the labor market has continued to strengthen,” said Ms. Yellen.

Banking giant Citigroup reported third quarter earnings last week and within the numbers it revealed that mortgage originations continued to decline. The bank is slowly pulling away from mortgage originations as it focuses in on other lines of business. Total mortgage originations fell to $3.2 billion in the third quarter, down from $6.5 billion in the third quarter of 2016. There is no clear reason as to why the bank is moving out of the mortgage servicing business, but the increase in regulations could be one of the bigger reasons.

Growing Piggy Showing Increasing Investment And Growth

Read More

Mortgage Rates edge higher, Low Inflation levers may not be temporary, Corporate Earnings season ramps up

October 11, 2017

Mortgage rates continued to edge higher in the latest week, as reported by the Mortgage Bankers Association. The 30-year conforming mortgage rate ($424,100 or less) rose to 4.16% from 4.12% with an average point of 0.44. Jumbo 30-year rates also rose from 4.09% to 4.11% with 0.31 points. The 30-year fixed FHA was essentially unchanged at 4%. The survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.

Federal Reserve Bank of Chicago President Charles Evans was speaking in Zurich on Wednesday, saying that low inflation levels here in the U.S. may not be a temporary phenomenon. Mr. Evans also said that the fundamentals for the economy here in the States are really very strong. Just recently, the Fed’s favorite inflation gauge, the annual Core Personal Consumption Expenditures (PCE), fell to 1.3% from 1.6% in April and well below the Fed’s target range of 2%.

Corporate earnings season ramps up this week with numbers from JPMorgan Chase and Citigroup on Thursday and Bank of America and Wells Fargo on Friday. The S&P 500 companies are expected to post a 4.6% rise in earnings year-over-year. According to Thomson Reuters, the 4.6% forecast is down from 5.9% at the beginning of the month, and 14.9% a year earlier.

Earnings On Monitor Showing Profitable Incomes And Lucrative Profits

Read More

Home Purchase Sentiment Index is up, Small Business Optimism fell in September, US Foreclosure rate at low

October 10, 2017

Fannie Mae reported its September Home Purchase Sentiment Index (HPSI) on Monday revealing overall housing confidence is up on rising renter optimism. The Fannie Mae HPSI increased 0.3 points in September to 88.3, matching the all-time high set in June. Americans who feel that it is a good time to buy a home rose last month. Renter respondents also showed increased optimism on purchasing a home. “The biggest driver for the increase in the HPSI is the rebound in the good time to buy sentiment, which outweighed the largest drag—a sizable reduction in the net share of consumers expecting home prices to rise over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

The NFIB Index of Small Business Optimism fell in September from 105.3 to 103.0, led by a big drop in sales expectations, not just in the storm-affected states, but across the nation. Within the report it showed that the number of small business owners who expected better sales plunged a net 12 points last month. Owners who think that it’s a good time to expand dropped a net 10 points. The NFIB says that the index remains very high by historical standards.

Analytics firm CoreLogic reports that the U.S. foreclosure rate remained at a 10-year low in July as the housing market continues to improve. The report showed that in July 2017, 4.6% of mortgages were delinquent by at least 30 days or more including those in foreclosure. That is below the 5.5% rate in July 2016. In addition, as of July 2017, the foreclosure inventory rate was 0.7% lower from 0.9% in July 2016.

Barber in barbershop

Read More

Payroll Growth declined in Sept, Hourly earnings surged, US Stocks hit record highs

October 06, 2017

The Labor Department reported on Friday that payroll growth declined in September mainly due to Hurricanes Harvey and Irma. Non-farm Payrolls declined by 33,000 last month versus the +75,000 expected. July was revised lower by 51,000 to 138,000, while August was revised higher by 13,000 to 169,000. The decline in job growth was the first negative number in seven years, but the numbers will most likely reverse higher in the coming months as Americans rebuild after the devastation in the hurricane impacted areas.

All was not lost within the report. Hourly earnings surged by 0.5 percent from August to September versus the 0.2 percent expected. Earnings are up 2.9% year over year. In addition, the Unemployment Rate fell to 4.2%, its lowest level in 16 years. Total unemployment, or the U6 number, fell to 8.3% from 8.6% and is down from 9.3% in September 2016.

The U.S. Stock markets hit record highs on Thursday due in part to hope on tax reform and after several positive economic reports were released in the past few weeks. The closely watched S&P 500 Stock Index hit 2,549.41 at the close of trading on Thursday, up nearly 20% from the presidential election in November. Stocks are lower today as investors take some profits after the mixed jobs report.


Read More

Mortgage rates edged higher, first time unemployment benefits decline, Amazon invading space of UPS and FedEx

October 05, 2017

Mortgage rates edged higher in the latest week though still remain just above all-time low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose two basis points to 3.85% this week with an average 0.5 point added on top of the rate. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Freddie Mac makes owning a home possible for millions of families and individuals by providing mortgage capital to lenders.

Americans filing for first-time unemployment benefits continued to decline in the latest week after the spike in claims due to storms Irma and Harvey. Weekly Initial Jobless Claims fell by 12,000 in the latest week to 260,000, below the 265,000 expected for the week ended September 30. Claims surged at the time the storms hit reaching nearly 300,000 from a low of 236,000 in late August. Unemployment benefits have remained below the 300,000 mark, which is considered a strong jobs market, for 135 consecutive weeks, the longest stretch since 1970 when the labor market was smaller.

Amazon Inc. is invading the space of UPS and FedEx with a new delivery service to make more products available for free two-day delivery and to ease the intense overcrowding at its warehouses. The service was rolled out in India two years ago and the company has been reaching out to U.S. merchants for national expansion here in the States. Amazon is looking for greater flexibility and control on deliveries and to save money at the same time. The question is for Amazon … what space will they invade next?

Read More

ADP Private Payrolls rose, Mortgage rates unchanged, Service sector best levels in 12 years

October 04, 2017

In the first of two key employment reports this week, ADP Private Payrolls rose by 135,000 versus the 160,000 expected, impacted by recent hurricanes Irma and Harvey. August was revised lower to 228,000 from 235,000. The numbers had little impact on trading as the ADP data is often seen as second tiered and off target. Breaking the numbers down; small businesses with less than 50 employees lost 7,000 jobs, 50-499 employee sized firms gained 63,000 while 500 or more sized companies gained 79,000 new workers.

The Mortgage Bankers Association reported on Wednesday that mortgage rates were essentially unchanged in the latest week and remain at historic lows. The 30-year fixed conforming rate ($424,100 or less) increased to 4.12% from 4.11%, 30-year jumbo (greater than $424,100) rose to 4.09% from 4.06%, while the FHA 30-year rate was at 3.99%. Those rates do carry at least a 0.30 point on top of the rate.

The service sector of the U.S. economy hit its best level in 12 years in September. The ISM Service Index rose to 59.8 last month, well above the 55.3 expected with 14 of the 17 non-manufacturing industries surveyed reporting growth in September. Within the report it showed that the employment component rose for the 43rd consecutive month, while new orders category surged. A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.

Read More

Manufacturing activity rose to highest in 13 years, construction spending rose, Las Vegas tragedy

October 02, 2017

Manufacturing activity across the U.S. rose to its highest level in 13 years in September due in part to strong order growth and healthy production. The ISM Index surged to 60.8 last month, above the 57.8 expected which was boosted by factory bookings and production as the recovery begins following storms Harvey and Irma. Within the report it showed that news orders, the production index and the employment index all saw healthy gains.

After two straight months of declines, construction spending rose in September buoyed by gains in both the private and public sectors. The Commerce Department reported that construction spending rose 0.5% last month while figures for August were revised lower to -1.2% from -0.6%. The government said that hurricanes Harvey and Irma had little impact on the numbers. Construction spending increased 2.5% from September 2016 to September 2017.

At least 50 people have died and more than 400 injured by the hands of a lone gunmen in Las Vegas around 10:00 p.m. PT time yesterday at a concert at the Mandalay Bay Resort and Casino. The shooter is reported to have taken his own life before police got to him. It is the worst mass shooting in U.S. history. The gunman was identified as Stephen Paddock, 64, of Mesquite, Nevada and is believed to have acted alone.

detail of a construction machine

Read More

Inflation in US at low levels in August, Personal spending barely rose, Manufacturing in Chicago surged

September 29, 2017

Inflation in the U.S. continued to run at low levels in August. The Fed’s favorite inflation gauge, the annual Core PCE, rose 1.3% from August 2016, the lowest annual increase since November 2015. The Core PCE strips out volatile food and energy. On a monthly basis, Core PCE rose 0.1% from July. The Federal Reserve continues to say that the low inflation levels are “transitory”, but low inflation levels have been reported for at least seven years. Transitory by definition means lasting only a short time.

Personal spending barely rose in August, which could be due in part to Hurricane Harvey, as it weighed on auto sales. Spending rose 0.1% in August, which was in line with estimates. Consumer spending accounts for two-thirds of U.S. economic activity. Personal incomes were up 0.2% in August, meeting expectations. Personal income refers to an individual’s total earnings from wages, investment enterprises, and other ventures. It is the sum of all the incomes received by all the individuals or household during a given period.

Manufacturing activity in the Chicago area surged in September hitting the highest levels in more than three years. Gains were seen in demand, employment and backlogs. The Chicago PMI rose to 65.2 in September, above the 58.0 expected. Jamie Satchi, economist at MNI Indicators, said: “The strong out turn in September means that on a quarterly basis business activity was broadly unchanged from an already impressive Q2. Looking forward, firms are on record expecting a busy Q4 despite disruptions caused by the recent storms, with just a handful expecting delivery times to lengthen between October through December.”

Spend Key Showing Spending And Finances

Read More