Market Forecast: Consumer Credit, MBA Purchase Applications, and a New President
Mortgage rates have not moved significantly since last week with most rates standing still awaiting election results.
This week, the consumer credit report comes out on Monday and the weekly MBA mortgage index is scheduled for release on Wednesday. Of course, the biggest impending announcement this week will be the results of Tuesday’s Presidential Election. Markets tend to not fluctuate drastically ahead of presidential elections with investors holding off on risky moves ahead of the announcement.
Changes in consumer credit indicate the general state of consumer financial security and predict future spending patterns. The demand for consumer credit is directly related to interest rates. In October, outstanding consumer credit was released as $25.9 Billion, up substantially from September’s numbers. Banks are issuing 16% more credit cards than they were a year ago (July 2015-July 2016), the highest level in nine years, as reported by Equifax Inc.
The Mortgage Bankers’ Association’s purchase application index measures single-family home sales and housing construction. Last week, applications decreased 1.2% from the previous week. In total, October saw two weeks of declines and one week of moderate increase, we can expect similar news this week. We expect little change from last week, keeping with the quiet trends.
Americans are heading to the polls to cast their vote on the nation’s new commander-in-chief on Election Day, Tuesday, November 8th. Historically, the market tends to slow down ahead of a presidential election, especially with one as unprecedented as the one we face Tuesday.
If you are unsure of where to vote, check out this helpful link.
Sources: Mortgage News Daily, HousingWire, CNBC, Boston Globe