Daily Rate Update: November 25th-29th

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Wednesday – November 27, 2019

The second reading on Q3 Gross Domestic Product (GDP) rose to 2.1% from 1.9%. Within GDP it showed that consumer spending rose a solid 2.9%. The holiday shopping season is expected to robust given the strong job market and a healthy consumer. However, business investments slid in Q3.

October Durable Orders were up 0.6% versus the -0.7% expected while Weekly Initial Jobless Claims fell by 15,000 to 213,000 hovering near 50-year lows. The Core PCE, the Fed’s favorite inflation gauge, rose 1.6% annually in October from 1.7% in September. Personal Incomes were flat while Spending rose 0.3%. And the last data point today showed that Pending Home Sales unexpectedly fell 1.7% in October from September.

Mortgage rates were essentially unchanged in the week ended November 22, 2019. The 30-year fixed-rate mortgage was 3.97% with 0.30 in points. The Refinance Index rose 4% while the Purchase Index fell by 1%. The Market Composite Index, a measure of total mortgage loan application volume, was up 1.5%. Rates remain historically low and should remain low for quite some time which will continue to support the housing market.

Courtesy of Mortgage Market Guide

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Tuesday – November 26, 2019

The Census Bureau reports that sales of new single-family homes declined in October while September was revised higher. New Home Sales fell 0.7% last month to an annual rate of 733,000 units, above the 710,000 expected while September was revised higher to 738,000 from 701,000. The 738,000 in September was the highest since July 2007. From October 2018 to October 2019, sales were up a whopping 31.6%! The median sales price fell 3.5% to $316,700. Sales fell in the Northeast and South with gains seen in the West and Midwest.

In housing news, the S&P Case-Shiller 20-City Index rose 2.1% year-over-year for the month ended in September. The national index rose 3.2%. On a monthly basis, prices were up 0.1% for both the 20-City Index as well as the national index. The FHFA reports that home prices rose 0.6% in September from August and were up 5.1% annually in September.

Fed Chair Powell spoke last night and signaled the Fed is on hold with interest rate policy while the labor market could get even stronger. Fed Chair Powell said, “At this point in the long expansion, I see the glass as much more than half full. With the right policies, we can fill it further, building on the gains so far and spreading the benefits more broadly to all Americans.” The Goldilocks economy lives on – talk of a recession anytime soon has all but faded away.

Courtesy of Mortgage Market Guide

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Monday – November 25, 2019

The Mortgage Bankers Association reports that independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $1,924 on each loan they originated, up from $1,675 per loan in Q2 2019. The $1,924 is near a seven-year high. In addition, the average loan balance for first mortgages reached a study high of $276,053 in the third quarter, up from $268,520 in the second quarter. Marina Walsh, MBA’s Vice President of Industry Analysis. “The increase in profits was primarily driven by declining production expenses and higher loan balances, which mitigated the effects of lower basis-point revenue.”

U.S. stocks are being boosted higher today after Reuters reported that the US and China are “very close” to a “Phase One” deal. Trade hopes and solid corporate earnings have lifted the Dow, S&P and NASDAQ to record highs in November. Add a strong labor market, which should continue to support consumer spending and you have the makings for an expanding U.S. economy.

The American Farm Bureau Federation’s 34th annual survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $48.91, or less than $5.00 per person. This is a 1-cent increase from last year’s average of $48.90. The centerpiece on most Thanksgiving tables – the turkey – costs slightly less than last year, at $20.80 for a 16-pound bird. That’s roughly $1.30 per pound, down 4% from last year.

Courtesy of Mortgage Market Guide

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