Mortgage rates ended the week a little lower despite an unexpected increase in CPI inflation data and improvement in the stock market.
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The Consumer Price Index (CPI), a widely-followed inflation indicator, increased in January to a 1.4% year-over-year gain, the highest level since October 2014. The core CPI reading, which excludes food and energy components, was 2.2% higher year-over-year.
The February Housing Market Index indicates optimism among home builders may be cooling as the index dropped to the lowest reading since May 2015. The current sales component was down 3 points and buyer traffic was also down a steep 5 points, another low not seen since last May.
Last week in the economy:
- Mortgage rates (the national average) declined 0.02% (2 basis points).
- Falling mortgage rates continue to drive the spike in refinance applications, up 16 percent in the February 12 week. Purchase applications experienced a slight dip of 4% but are still a strong 30% higher than this time last year.
- Initial jobless claims fell back 7,000 to 262,000 for the February 13 week. This is the lowest reading since November 2015.
- January Housing Starts were softer-than-expected, down 3.8 percent to an annualized rate of 1.099 million. Permits were also down 0.2 percent. Weakness was experienced specifically in the single-family homes sector, while permits for multi-family units increased by 2.1 percent.
What's on the economic calendar for the week of February 22, 2016:
Tuesday: Consumer Confidence & Existing Home Sales
Wednesday: MBA Mortgage Applications & New Home Sales
Thursday: Jobless Claims, FHFA House Price Index, Bloomberg Consumer Comfort Index
Friday: GDP & Consumer Sentiment
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