Market Recap: Mortgage Rates Drop, Consumer Sentiment Soars, and More
This week, Freddie Mac reported the 30-year fixed-rate average interest rate dropped to the lowest level of the year so far, driven down by the political climate. Job openings increased, but hiring declined. The consumer sentiment index continued to surge and retail sales dropped.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) reported 5.74 million job openings in February, up 2.1% from January. However, hiring has tapered off, down to 5.31 million hires, 2.1% lower than January. The number of voluntary resignations also declined to 3.08 million, 3.2% lower than January. These numbers reflect a less confident job market.
The University of Michigan’s consumer sentiment index defied expectations to improve to a level of 98 in April. The survey asks 500 consumers for their opinion toward personal finances, inflation, unemployment, government policies, and interest rates. The survey is a sentiment index and purely opinion-based and does not translate into economic action.
In March, retail sales dropped -0.2% month-over-month after declining in six of thirteen retail categories. The loss was driven by drops in automotive sales, building materials, and gasoline services. This report helps explain why major retailers are shuttering stores and laying off employees. Softened consumer spending may turn around as consumer sentiment improves.
Mortgage Bankers Association Chief Economist Michael Fratantoni stated, “conventional purchase applications reach[ed] their highest level on a seasonally adjusted basis since October 2015.” As mortgage rates drop, the spring housing market appears to be off to a solid start.
Sources: Mortgage News Daily, Chicago Tribune, MarketWatch, CNBC, Bloomberg