• Doug Luza
  • News
  • Market Forecast: Construction Spending, Mortgage Applications, ADP Employment Report

Market Forecast: Construction Spending, Mortgage Applications, ADP Employment Report

  • July 02, 2018

Mortgage rates held steady last week, not moving much in either direction.  This week, markets are closed on Wednesday in observance of Independence Day.  In housing news, US construction spending comes out on Monday and the weekly mortgage application survey comes out on Wednesday.  The ADP employment report is also scheduled for release. 

US construction spending tracks total spending on private and public construction projects.  Construction spending can be used to predict activity like new home sales.  In April, construction spending accelerated, up 1.8% month-over-month and 7.6% year-over-year, driven by home building.  Residential construction specifically saw an uptick, private residential projects improved 4.5% month-over-month, the biggest gain since November 1993.  Spending on public projects decreased 1.3%, and spending on federal government construction projects fell 10.2%. 

The Mortgage Bankers Association (MBA) weekly mortgage application survey shows week-to-week changes in the submission of new purchase and refinance mortgage applications.  Mortgage activity slowed for the week ending 6/22.  New purchase applications fell 6.0% and refinance applications dropped 4.0% for a composite decrease of 4.9%.  After showing strength the previous week, home buyers are struggling to compete over limited for-sale inventory and rising home prices.  Redfin head of analytics, Pete Ziemkiewicz explained, “people listing their homes for sale in higher numbers this April and May is good news for buyers, and good news for home sales.” 

The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million workers nationwide.  The labor market has been faring especially well for much of the past few years.  The unemployment rate recently dropped to an 18-year-low and the market is nearing full employment.  In May, the ADP employment report showed the addition of 178,000 jobs.  Small businesses added 38,000 jobs, mid-size businesses added 84,000 jobs, and large firms added 56,000 jobs. Hiring was led by professional and business services, followed by leisure and hospitality, then construction, and finally manufacturing.   

Heading into the second half of the year, buyer demand is high, and supply is starting to catch up.  A strong housing starts report last month may indicate a reprieve for home buyers competing over limited inventory.  After June’s rate hike, interest rates have started to settle amidst international trade concerns.  Home buyers looking to buy, or homeowners interested in a refinance still have a chance to lock historically low interest rates this summer. 


Sources: CNBC, CNBC, Econoday, MarketWatch, Mortgage News Daily, USA Today

Doug Luza
Branch Manager
NMLS # 311377
Branch NMLS # 1198991

Doug Luza

PHONE: (832) 575-2210

© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).