Market Forecast: Construction Spending, Mortgage Applications, and ADP Employment Report
Mortgage rates continue to fall, following the Federal Open Market Committee’s March meeting. Coming up this week in housing news, the February construction spending report comes out on Monday, followed by the weekly mortgage application survey on Wednesday. Other market-moving reports include the ADP employment report.
US construction spending tracks total spending on all private and public construction projects. After a couple of delays due to the partial government shutdown, the reports are back on schedule. US construction spending increased in January, up 1.3% month-over-month to a seasonally adjusted annual rate of $1.28 trillion. Spending on public construction projects, specifically government projects, was up. Single-family home construction was down 0.7% month-over-month.
The Mortgage Bankers Association (MBA) weekly mortgage application survey tracks week to week changes in new purchase and refinance mortgage application submissions. For the week ending 3/22, both new purchase and refinance applications surged on the heels of lower interest rates. New purchase applications increased 6.0% and refinance applications jumped 12.0% for a composite increase of 8.9%. Following the Fed’s comments on pausing interest rate hikes, mortgage rates across all types of loans have dropped. Most real estate professionals expect rates to stay low for the rest of the year.
The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million US workers nationwide. Though the data is limited to private businesses using the ADP payroll software, it’s still used to gauge employment trends. In February, the ADP employment report showed the addition of 183,000 jobs. The pace of hiring has slowed, but the unemployment rate remains at a historical low, suggesting a tight labor market.
Average mortgage rates have dropped to their lowest level in months, following dovish remarks from Federal Reserve Chair Jerome Powell. Home buyers looking to make a purchase or homeowners considering a mortgage refinance, may benefit from making mortgage moves this year.
Sources: AP News, Bloomberg, CNBC, Econoday, MarketWatch, Mortgage News Daily