Weekly Economic Review: Rates & Housing Starts Decline, Fed Meeting Minutes Released

Posted by Laine Smith on 11/20/15 2:16 PM

Topics: Economy

U.S. economic data and the release of the October Fed Minutes had little impact on mortgage rates, which ended the week a little lower.

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Image courtesy of hywards at FreeDigitalPhotos.net

The minutes of the Fed's October meeting were released Wednesday with little surprise, though officials changed the wording of the October meeting statement to include the reference of a "possibility" for a December rate hike.

"Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting," the October meeting minutes said.

Housing starts took a big hit in October, falling 11 percent due to a drop in multi-family homes. Starts for multi-family homes spiked in September but fell back 25 percent the following month. Single-family starts fell 2.4 percent for October but remained near the best levels of the year. Building permits for single-family homes rose to the highest level since December 2007, a great indication of future activity for the housing market.

Last week in the economy:

  • Mortgage rates (the national average) fell 0.02% (2 basis points).
  • The spike in interest rated caused by the strong employment report in October flipped a switch for MBA purchase applications, up 12 percent in the November 13 week. Refinancing demand also increased, rising 2 percent for the week.
  • Initial Jobless Claims fell 5,000 in the November 14 week to 271,000.
  • The Housing Market Index from the nation's home builders showed weakness at 62 for November. Future sales and present sales components both fell several points from October but are still at a strong level.
  • The Consumer Price Index, the most widely followed monthly indicator of inflation, increased minimally by 0.2 percent in October with the core also up 0.2 percent, both meeting expectations. Year-over-year the core rate is unchanged at +1.9 percent.

What's on the economic calendar for the week of November 23, 2015:

Monday: Existing Home Sales

Tuesday: GDP & Consumer Confidence

Wednesday: MBA Mortgage Applications, Jobless Claims, Consumer Sentiment & New Home Sales

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