This week’s biggest economic news stories centered on dropping mortgage rates, housing market confidence and the consumer price index.
For the first Housing Market Index report of 2017, home builders remain confident in housing market conditions. The index dropped just two points from December’s cycle high of 69. At 67, the index is up six points from January 2016.
January’s Housing Market Index showed considerable strength in sales for the next six months and prospective buyer traffic, which held above the 50-point mark. The homebuyer traffic component held in the mid-40’s for most of 2016 and hit a high not seen in over a decade in December.
Housing starts, which have been volatile for the last several months, jumped 11.3 percent in December to an annualized rate of 1.226 million. Multi-unit starts were the headliner for the increase, up 57 percent, while single-family starts declined by 4 percent. Permits, however, increased 4.7 percent for single-family homes while multi-unit permits decreased by 9.0 percent.
Consumer prices in December increased as expected due to inflating prices of gasoline. The core consumer price index, which subtracts food and energy costs, increased 0.2 percent from November and was up 2.2 percent year-over-year.
This week in the economy:
- The 30-year fixed-rate averaged 4.09 percent (down 0.3 percent) with 0.5 points as of January 19, according to Freddie Mac.
- Purchase applications fell a seasonally adjusted 5 percent in the January 13 week, according to MBA Mortgage Applications. Refinancing applications, though, increased by 7 percent.
- Initial jobless claims in the week of January 14 fell a sharp 15,000 to a level of 234,000, which is much lower than the low-end consensus of 252,000. This moved the 4-week average down by nearly 4,000 to 246,750. This data is the sample week for the January employment report.
- The Bloomberg Consumer Comfort Index has held steady for the past few months, pushing up only 0.1 points to 45.2 for the week of January 15.
What’s on economic calendar for the week of January 23, 2017:
- Tuesday – Existing Home Sales
- Wednesday – MBA Mortgage Applications, FHFA House Price Index
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, New Home Sales
- Friday – GDP, Consumer Sentiment
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