On the economic reports menu this week, it’s housing data with a side of jobless claims. I know your brains are hungry, so let’s dig in.
Headline News
Housing Market Index: Home builder sentiment remained unchanged at 58 in April, the third straight month it’s held that number. Present sales did have a two-point dip to 63, but expectations for sales over the next six months are up one point at 62. Traffic of potential buyers in new homes is still lower than hoped, but it is up one point to come in at 44. Looking briefly at regional data, the West is leading the way at 67. Meanwhile, the South sits at 59 and the Midwest is at 56. The Northeast continues to see drops in its importance as a bellwether of residential construction. It comes in at 44.
Housing Starts: In a potential blow for the housing market, starts were down 8.8% in March to a seasonally adjusted annualized rate of 1.089 million. The weakness in starts is roughly equal between single-family and multi-family construction. A change in New York City permit laws that went into effect last year is leading to a bunch of starts in the Northeast right now. All other regions saw declines in this area. On the permit side, they’re down 7.7% to 1.086 million. Most of the drop is tied to multi-family permits. In the regional data, the Midwest has a year-on-year gain in permits of 24.2% and the South is up 11.3% over the same period. On the downside, permits are down 6.1% annually in the West and 21.7% in the Northeast. The good news is starts are up 14.2% on the year and permits have risen to 4.6%.
MBA Mortgage Applications: Applications were up 1.3% this week. Despite the average rate on a 30-year conforming mortgage being up one basis point to 3.83%, refinances climbed 3.0%. This helped overcome a 1.0% downturn in purchase applications.
Existing Home Sales: Existing home sales were up 5.1% in March to a seasonally adjusted annualized rate of 5.330 million. They’re up 1.5% on the year. Breaking out the data by its components, single-family homes were up 5.5% to 4.760 million. Single-family home sales are up 2.6% for the year. Meanwhile, condos are up 1.8% on the month and down 6.6% for the year. On the price side, they’re up 5.0% for the month and 5.7% on the year, coming in at $222,700. There was a 5.9% gain in the number of homes on the market and supply relative to sales is up to 4.5 months from 4.4 months in February.
Jobless Claims: Initial claims for unemployment fell 6,000 last week to 247,000. The four-week average is down 4,500 to 260,500. Continuing claims are down 39,000 to 2.127 million. The four-week average of continuing claims is down 10,750 to 2.17 million.
FHFA House Price Index: House prices are up 0.4% for the month of February and 5.6% for the year. One negative is that it’s the weakest monthly gain of the year. In fact, the year-on-year rate had been 6.0% before this. The declining pace of appreciation and weakness in starts isn’t a good sign for the housing market.
Mortgage News
Mortgage rates were a mixed bag this week, mostly staying close to where they’ve been.
Thirty-year fixed-rate mortgages (FRMs) averaged 3.59% with an average 0.6 point for the week ending April 21, 2016, up from last week when they averaged 3.58%. A year ago at this time, 30-year FRMs averaged 3.65%.
15-year FRMs this week averaged 2.85% with an average 0.5 point, down from last week when they averaged 2.86%. A year ago at this time, 15-year FRMs averaged 2.92%.
Five-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.81% this week with an average 0.5 point, down from last week when they averaged 2.84%. A year ago, 5-year ARMs averaged 2.84%.