January Markets in a Minute

January Markets in a Minute

January 25, 2018

The Economy

The government shutdown had a nominal effect on markets and no effect on rates. Another shutdown is possible February 8th, the new deadline for a deal.
The dollar slumped this week, its biggest weekly decline in 18 months. Treasury Secretary Steven Mnuchin says a weaker dollar could boost U.S. trade though. Jobless claims were up from last week’s 45-year low, but still lower than expected. The labor market continues to tighten with near full employment.

Housing News

Existing home sales were down 3.6% in December from November, but were up 1.1% year-over-year. A lack of supply of homes on the market played a role.
New home sales were also down in December, blamed partly on unseasonable cold temperatures. However, new home sales were 14% higher than a year ago.
Rising mortgage rates have spurred more buyers off their couches and into the market. Mortgage applications were up 4.5% over last week. 6.1% over last year. Due to the competition among buyers, and the shortage of inventory, it is more important than ever for buyers to be pre-approved before they began looking for homes to buy. This is especially important for Dallas/Fort Worth first-time homebuyers and self-employed buyers.

January 18, 2018

The Economy

Jobless claims plunged to the lowest level since 1973 this week, the biggest drop since April 2009. Labor market strength can pressure rates higher.
According to a recently released Fed report, the economy and inflation expanded at a modest-to-moderate pace from November to the end of 2017. Inflation, which pressures interest rates to move higher, is not increasing across the U.S. consistently. West coast metro areas are showing higher inflation.

Housing News

Although homebuilder confidence was down slightly in January, it’s still strong. Builder’s biggest concerns remain costs of material and labor shortages. New housing starts fell more than expected in December. However, the moderation is likely to be temporary amid strong demand for housing.
Mortgage purchase applications jumped 4.1% last week, and volume rose 5.6% over last year. Speculation is that consumers fear rates may be increasing. Based on current market trends, rising rates are highly likely.

January 11, 2018

The Economy

Producer prices fell for the first time in nearly 1-1/2 years in December. This could temper expectations that inflation will accelerate in 2018.
Unemployment benefit claims increased for the 4th straight week, to a 3-month high. Likely due to weather, the change doesn’t signal weakness in the labor market.
The implemented tax reform is already being credited for increased economic growth. Multiple companies are reported to be passing savings on to workers. There have been numerous reports of bonuses being paid to employees this year. In many cases, this could be a perfect opportunity for homebuyers to begin building their down payments for home purchases.

Housing News

Mortgage applications on newly constructed homes rose 18% in December from the previous month. The applications were 7.8% higher than December 2016. The seller of a 9,000 square-foot mansion in Malibu is willing to accept bitcoin as part of the payment. The volatile cryptocurrency is not usually used for home purchases.
Home equity has hit a new record high, reported to be $5.5 trillion. Remodeling spending topped $152 billion in 2017 and is forecast to increase in 2018.

January 4, 2018

The Economy

Tax reform passed for 2018 and is expected to spur more economic growth. A stronger economy could pressure mortgage rates higher through 2018.
The minutes from the Fed’s last meeting showed concerns over sluggish inflation. The lack of inflation has helped to keep mortgage rates low in the past.
The labor market continues to show strength. The private sector added 250,000 jobs in December, the biggest increase since March.

Housing News

Home prices continue to soar. CoreLogic reports for November 2017 show that home prices were up year-over-year by 7%, the 4th consecutive month of growth.
The Federal Housing Finance Agency is considering the VantageScore model instead of FICO for mortgage lending. This could result in more qualified buyers.
The final tax reform plan changed the mortgage deduction on new loans from a cap of $1 million to $750,000, with an additional $100,000 for home equity loans.
If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.
Rate movements and volatility are based on published; aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.
Markets in a Minute provided by Surefire CRM.
Check out the full story here: January Markets in a Minute