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Mortgage Market in Review – July 23, 2018

   

Market Comment

Mortgage bond prices finished the week lower which put upward pressure on rates. Retail sales, an indication of the strength of the consumer, rose 0.5%. Sales excluding automobiles rose 0.4%. That data was near expectations however May’s report was revised upward. Industrial Production rose 0.6% versus the expected 0.5% increase. Capacity Utilization was 78% which was about as expected. The NAHB housing market index was 68 versus the expected 69. Housing starts were 1173K. Analysts looked for a reading of 1318K. Weekly jobless claims and the Philadelphia Fed report showed the economy remained strong. The Fed Beige book showed price increases in all districts. We ended the week worse by 1/8 of a discount point.

LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Existing Home Sales Monday, July 23,
10:00 am, et
5.45M Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
FHFA House Price Index Tuesday, July 24,
10:00 am, et
Up 0.5% Moderately Important. A measure of single family house prices. Weakness may lead to lower rates.
2-year Treasury Note Auction Tuesday, July 24,
1:15 pm, et
None Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
New Home Sales Wednesday, July 25,
10:00 am, et
692K Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
5-year Treasury Note Auction Wednesday, July 25,
1:15 pm, et
None Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Durable Goods Orders Thursday, July 26,
8:30 am, et
Up 0.4% Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
Weekly Jobless Claims Thursday, July 26,
8:30 am, et
212K Important. An indication of employment. Higher claims may result in lower rates.
7-year Treasury Note Auction Thursday, July 26,
1:15 pm, et
None Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Q2 GDP Friday, July 27,
8:30 am, et
Up 2.2% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment Friday, July 27,
10:00 am, et
97 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Existing Home Sales

The National Association of Realtors releases existing home sales data near the end of each month. The data is derived from a sampling of MLS data across the nation. The release shows the current sales rate for existing single-family, coops, and condos. A national figure and four regional figures are provided. The housing market is a critical component of the US economy. A house is usually one of the largest assets a consumer owns. Housing usually leads market recoveries. The housing industry still remains in transition while some areas show strength, others languish. While the data usually isn’t a big market mover it still has the potential to result in some market volatility.


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