Market Forecast: Construction Spending, Mortgage Apps, and ADP Employment Report
Mortgage rates continued to hold steady last week, trending slightly upward according to Mortgage News Daily. This week will be light on housing news and heavy on jobs reports. Jobs reports, like this week’s ADP employment report, are still relevant to the housing market because labor market growth triggers spending and borrowing by gainfully employed consumers.
US construction spending tracks the total spend on all construction activity including residential, non-residential and public projects. Residential construction spending is most pertinent to the housing market; however, all construction activity generates economic momentum with the creation of jobs and the purchase of building materials. In January, US construction spending declined 1.0% month-over-month and increased 3.1% year-over-year.
The Mortgage Bankers Association (MBA) releases a weekly survey of mortgage applications. Spring is typically busy for the housing market, with warmer weather enticing buyers and sellers to start shopping.
The ADP employment report discloses hiring activity for approximately 400,000 businesses across the country. This report is based on private companies that use the ADP payroll system. Growth in any sector of the labor market indicates strength. In February, the ADP employment report showed the addition of 298,000 jobs.
A strong labor market is good news for the housing market. Increases in job availability and income can lead to consumer spending on goods and services and eventually borrowing and lending for larger purchases like housing.
Sources: Mortgage News Daily, Bloomberg, MarketWatch