Market Forecast: Construction Spending, Mortgage Applications, and ADP Employment Report
There was no significant mortgage movement last week. This week, US construction spending will be released on Tuesday, and on Wednesday the Mortgage Bankers Association (MBA) will release its weekly mortgage application survey and the ADP employment report comes out.
Construction spending tracks the total amount spent on public and private construction projects. Housing looks specifically at residential construction, but all construction projects will spur economic momentum with the creation of jobs and purchase of building materials. In July, construction spending dropped 0.6%.
The MBA mortgage application survey had experienced some volatility last month due to data distorted by hurricane damage. Hurricanes Harvey and Irma devastated the Southeast and skewed numbers from Texas and Florida. For the week ending 9/22, new purchase applications increased 3.0%, but refinance applications declined 4.0%.
The ADP employment report reviews employment data from approximately 400,000 private US businesses employing 23 million workers. In August, the ADP employment report showed the addition of 237,000 jobs.
The housing industry has faced limited inventory causing home price appreciation and a competitive market. An increase in residential construction spending would indicate an upcoming increase in available inventory. Job growth also drives housing activity through economic momentum. Mortgage rates remain historically low, despite rising home prices.
Sources: Bloomberg, MarketWatch, Mortgage News Daily