Thursday – April 18, 2019

Consumer spending remained solid last month due in part to a strong labor market. March retail sales jumped 1.6% from February versus the 0.9% expected and was the largest gain in 18 months led by gains in auto sales and gasoline receipts. Retail Sales x-autos also surged by 1.2%, well above the 0.7% expected. The stronger numbers could give a boost to first quarter GDP when the data is released next week.

Labor market news continues to come in on the strong side with Weekly Initial Jobless Claims falling 7,000 to 192,000, lows seen in September 1969. The four-week moving average of claims, which irons out seasonal abnormalities, fell 6,000 to 201,250, the lowest reading since November 1969. There are no more job openings than there are available workers. To put the low numbers into perspective… at the height of the Great Recession Weekly Initial Jobless Claims hit 956,000 the week of January 10, 2009.

Mortgage rates continued to edge higher for the third consecutive week as bond prices fell and yields rose. Freddie Mac reports that the 30-year fixed-rate mortgage rose five basis points to 4.17% with an average 0.5 in points and fees. Rates remain at lows seen in the week ended January 25, 2018. Low rates and easing home price gains should fuel the spring housing market.

Courtesy of Mortgage Market Guide

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Wednesday – April 17, 2019

The spring homebuying season got off to a decent start though sales have somewhat eased this season. RE/MAX reports that home sales in March were up 29% from February though down 8.6% from a year earlier. RE/MAX reports that March 2019 was the 8th consecutive month of year-over-year declines and the slowest start to the spring buying season in 5 years. RE/MAX CEO Adam Contos said, “Although the seasonal bounce that typically ends the first quarter wasn’t as strong as in the past few years, conditions are in place for a healthy spring selling season.”

Single-family rental prices churned higher year-over-year in February fueled in most part to low-end rentals. Analytics firm CoreLogic reports that prices rose 2.9% year-over-year in February 2019, up slightly from the 2.7% annual gain seen in February 2018. Low-end rental rose 3.7% year-over-year while high-end rentals rose 2.4%. “As with the for-sale market, supply of single-family rentals saw very low levels in February, putting upward pressure on the cost of both for-sale and for-rent homes,” said Molly Boesel, Principal Economist at CoreLogic.

Home and refinance borrowing costs edged higher in the latest week though they remain at 12-month lows. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage rose four basis points in the latest survey to 4.44% with an average 0.47 in points. The Market Composite Index, a measure of total mortgage loan application volume, fell 3.5% last week. The Purchase Index rose marginally and is now at the highest level since April 2010 while the Refinance Index fell by 8.2%.

Courtesy of Mortgage Market Guide

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Tuesday – April 16, 2019

Home builders remained confident in the market for newly-built single-family homes in April though they continue to deal with affordability concerns due to a shortage of construction workers and buildable lots. The NAHB Housing Market Index rose one point this month to 63 where any number over 50 indicates that more builders view conditions as good than poor. Sentiment levels have hovered in the low 60s for the past three months.

Better-than-expected earnings from UnitedHealth Group, J&J and Bank of America are pushing US stocks modestly higher this morning as the Dow, S&P and NASDAQ seem poised to move another leg higher. The S&P 500 closed at 2,905 yesterday, just below its all-time closing high of 2,930 hit on September 20, 2018. In addition, The Conference Board reports that its Global Consumer Confidence Index remains near all-time highs.

Courtesy of Mortgage Market Guide

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Monday – April 15, 2019

US stocks are lower to begin the holiday shortened trading week after mixed earnings numbers from Goldman Sachs and Citigroup as earnings season kicks into high gear. The S&P 500 Stock Index, currently at 2,902, is now just 26 points from its all-time closing high of 2,930 hit back on September 20, 2018. The earnings and guidance coming from Wall Street during earnings season may determine whether stocks move another leg higher or take a pause.

Chicago Fed President Charles Evans said this morning he doesn’t see a recession in the near future. Mr. Evans went on to say that recent economic data has strengthened, the economy is solid, low inflation is a bit of a concern and sees the Fed Funds Rate remaining at current levels until the fall of 2020. With global central banks keeping interest rates at extremely low levels and are seen to remain there for quite some time, there should not be a big rise in mortgage rates in the foreseeable future.

Courtesy of Mortgage Market Guide

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