Market Forecast: Construction Spending, Mortgage Apps, and ADP Employment Report
Average mortgage rates are still historically low following the two recent Federal Reserve rate cuts. This week in housing news, US construction spending comes out on Tuesday and the Mortgage Bankers Association (MBA) weekly mortgage application survey comes out on Sunday. In jobs-related news, the ADP employment report is scheduled for release on Thursday.
US construction spending tracks total spending on all private and public construction projects. Overall construction spending increased 0.1% month-over-month. Spending on public projects improved and spending on private projects declined. Spending on private residential construction, specifically, increased 1.4% month-over-month driven by more single-family home building.
The Mortgage Bankers Association (MBA) weekly mortgage application survey declined a composite 10.1% for the week ending 9/20. New purchase application submissions declined 3.0% and refinance application submissions dropped 15.0%. The data shows just how rate sensitive home buyers and homeowners have become. Average mortgage rates have increased slightly this month.
The ADP employment report is based on data from approximately 400,000 US businesses employing approximated 23 million employees nationwide. The data is limited to private businesses that use the ADP payroll system but is still used to gauge employment trends. In September, the ADP employment report added a robust 195,000 jobs, confirming the labor market is still strong.
A strong labor market and more construction activity could set us up for a strong housing market this Fall. One of the biggest challenges buyers have faced in recent years has been lack of available homes for sale. With single-family home building picking up, home buyers may soon have more inventory to choose from.
Sources: CNBC, Econoday, MarketWatch, Mortgage News Daily, Reuters