Market Forecast: Mortgage Applications, Housing Market Index, Housing Starts and Building Permits

Blog posted On January 14, 2019

As the partial government shutdown enters its fourth week, Congress and President Trump have yet to reach an agreement over a budget dispute regarding border security and the possible construction of a border wall along the United States – Mexican border.  Due to the government shutdown, the release of the housing starts and building permits report may be delayed.  Other housing-related reports scheduled for this week include the Mortgage Bankers Association (MBA) weekly mortgage application survey and the National Association of Home Builders’ (NAHB) housing market sentiment index. 

The MBA weekly mortgage application survey tracks week to week changes in new purchase and refinance mortgage application submissions.  For the week ending 1/4, both new purchase and refinance application surged as home buyers and homeowners took advantage of an end of year decline in mortgage rates.  New purchase applications increased 17.0% and refinance applications increased 35.0% for a composite increase of 23.5%.  Mortgage rates trended slightly downward in December and have held steady amidst the government shutdown.

The NAHB housing market sentiment index evaluates home builders’ perceptions on current activity, expectations for the next six months, and buyer foot traffic.  Any reading above 50 is considered positive.  Home builder sentiment declined in December, down to a level of 56.  Current sales conditions fell to 61, expectations for the next six months dropped to 61, and buyer foot traffic sank to 43.  According to NAHB Chairman Randy Noel, consumer demand exists, but some potential home buyers are hesitant to make real estate moves because of affordability concerns.

Housing starts track ground broken on residential projects and building permits track permits issued.  In November, housing starts rebounded, up 3.2% month-over-month to a seasonally adjusted annual rate of 1.256 million units.  Building permits also improved, up 5.0% month-over-month to a seasonally adjusted annual rate of 1.328 million.  Activity was spurred by multi-family construction.

The partial government shutdown continues this week, but has had little to no impact on the mortgage industry.  If you have questions about how the government shutdown will affect your mortgage, please let me know. 

Sources: CNBC, Econoday, HousingWire, MarketWatch, Mortgage News Daily