Market Recap: Mortgage Apps Up, Consumer Price Index Accelerates, Retail Sales Climb
Mortgage rates trended slightly lower this week, continuing to hover near year-long lows. The Mortgage Bankers Association (MBA) weekly mortgage application survey reacted with an increase in both new purchase and refinance mortgage applications. Both the consumer price index and core CPI increased. Retail sales are also up.
For the week ending 11/8, new purchase application submissions increased 5.0% and refinance application submissions increased 13.0% for a composite increase of 9.6%. Lower mortgage rates continue to move the mortgage market. The MBA’s associate vice president of economic and industry forecasting, Joel Kan predicted, “with rates still in the 4% range, we continue to expect to see moderate growth in refinance activity in the final weeks of 2020.”
The consumer price index tracks the changes in the average prices of a fixed basket of goods and services sold to final consumers. The consumer price index climbed 0.4% month-over-month in October. Core CPI, excluding food and energy costs, is up just 0.2% month-over-month. Gas prices have stabilized, but healthcare costs are going up. Recreation and grocery costs are up while prices for clothes, furniture, vehicles, and plane tickets are down.
Retail sales increased 0.3% month-over-month with consumers spending more at gas stations, car dealers, and online retailers. Excluding vehicles and gas, sales are only up 0.1% month-over-month. Sales declined at restaurants, home improvement stores, and clothing and electronic stores. With holiday spending season ahead, consumers are expected to keep spending.
Lower mortgage rates will likely continue to motivate home buyers and homeowners to make mortgage moves through the end of the year and some regions are going to see competitive markets. If you’re looking to buy a home this winter, get preapproved for mortgage financing before you start shopping.
Sources: CNBC, Econoday, MarketWatch, MarketWatch, MarketWatch, Mortgage News Daily