Market Forecast: Construction Spending, Mortgage Applications, and the ADP Employment Report
There was not much mortgage rate movement during last week’s shortened holiday week. This week in housing news, US construction spending and the Mortgage Bankers Association (MBA) weekly mortgage application survey are both scheduled for release. In employment news, the ADP employment report comes out on Wednesday.
US construction spending tracks total spending on public and private construction projects. In September, construction spending increased 0.5% month-over-month but declined 2.0% year-over-year. Private residential construction spending specifically increased 0.6% month-over-month, the highest level since December 2018. Lower mortgage rates have triggered home buying activity, but many metros are still struggling with limited available homes for sale. Home builders are investing in construction to replenish housing inventory as buyer demand stays strong.
The MBA weekly mortgage application survey tracks week to week changes in the submission of new purchase and refinance mortgage applications. For the week ending 11/22, new purchase application submissions declined 1.0% and refinance application submissions jumped 4.0% for a composite increase of 1.5%.
The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million employees nationwide. The data set is limited to private businesses using the ADP payroll system but is still used to gauge employment trends. In October, the ADP employment report showed the addition of 125,000 jobs, slightly higher than expected.
A strong labor market plus low mortgage rates is likely to continue to fuel home sales this year. Additionally, many homeowners could benefit from a refinance, even if they bought their home recently. If you have any questions about today’s rates, please let me know.
Sources: CNBC, Econoday, Fox Business, MarketWatch, Mortgage News Daily, Reuters