Market Recap: Mortgage Apps Down, ADP Employment Up, Construction Spending Delayed
The US government is still in a state of partial shutdown, delaying some of this week’s economic indicators like US construction spending. Of the reports released, the Mortgage Bankers Association (MBA) weekly mortgage application survey declined, and the ADP employment report exceeded expectations.
Even with a recent decline in average mortgage rates, the MBA weekly mortgage application survey fell for the two-week period ending on 12/28. Refinance application submissions are down 12% and new purchase application submissions are down 8% for a composite decrease of 9.8%. The two-week period covered the Christmas holiday, which may have caused some of the slowdown. MBA Associate Vice President of Economic and Industry Forecasting Joel Kan also noted the government shutdown’s impact, stating, “Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity.”
The ADP employment report added more jobs that expected in December. Private payrolls added 271,000 jobs, the highest figure since February 2017. Despite recent stock market trouble and expected economic slowdown, the labor market continues to fire on all cylinders. Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “At the current pace of job growth, low unemployment will get even lower.”
The release of the US construction spending report was delayed due to the partial government shutdown.
As of this morning, the US government remains shutdown, due to a spending dispute about a border wall along the Mexican border. Over the past two weeks, the government shutdown has delayed the release of some housing-related reports including new home sales and US construction spending. The reports will likely be released once the government reopens.
Sources: CNBC, Econoday, HousingWire, MarketWatch, Mortgage News Daily, USA Today