In this week’s economic review, mortgage rates declined while the pending home sales index offset the outlook for future existing home sales. Reports released this week also highlighted consumer confidence, as well as confidence in the job market.
Last week’s economic review highlighted January existing home sales, which hit an especially strong stride. According to the pending home sales index for January, that lift off may be short-lived. The index dropped 2.8 percent, which will likely amount to weakness in sales in February and March. On top of January’s decline, December’s report had a downward revision from plus 1.6 percent to plus 0.8 percent.
Fourth quarter GDP saw no change at a 1.9 percent annualized growth, but highlights from Tuesday’s report included consumer spending which is up 0.5 percent to a rate of 3.0 percent.
Speaking of consumerism, the consumer confidence report keeps climbing to post-election highs. At a level of 114.8 for February, the index extended high-end consensus levels with a 3.2-point gain from January. Strengths in the report included a smaller amount of consumers say jobs were currently hard to get, as well as a higher amount of consumers having a positive outlook for the future job market.
According to the Gallup U.S. Job Creation Index, workers perceptions of job creation at their place of employment are surpassing 2016 highs. The index saw a 1-point gain from January, standing at a level of 35.
This week in the economy:
- The 30-year fixed-rate dropped as of March 2 with the average at 4.10 percent with 0.5 points, according to Freddie Mac.
- Purchase applications rose a seasonally adjusted 7 percent in the week of February 24, according to MBA Mortgage Applications. Refinance applications continued their decline, dropping by 1.1 percent.
- Initial jobless claims pressed even lower in the week of February 25. Initial claims dropped a sharp 19,000 to a lower-than-expected 223,000, according to Bloomberg. The 4-week average is down 6,250 to 234,250, pointing to considerable economic strength and a new low for the economic cycle.
- The Bloomberg Consumer Comfort Index jumped nearly 2 points in the week of February 26. The index stands at a level of 49.8, which is a new high for the economic cycle.
The economic calendar for the week of March 6, 2017:
- Monday – Gallup US Consumer Spending Measure
- Tuesday – Consumer Credit
- Wednesday – MBA Mortgage Applications, ADP Employment Report
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Employment Situation
To receive updates on mortgage rates and other economic news, sign up for our weekly economic updates.