Market Forecast: Construction Spending, Mortgage Applications, ADP Employment Report
Markets are closed today in observance of the Labor Day holiday. This will be a short week with lots of news. The US construction spending report comes out on Tuesday, the Mortgage Bankers Association (MBA) weekly mortgage application survey comes out on Wednesday, and the ADP employment report comes out on Wednesday.
US construction spending counts total spending on all construction projects, public and private. In June, construction spending declined 1.3% month-over-month to a seasonally adjusted annual rate of $1.29 trillion. Despite lower mortgage rates, builders are facing labor and land shortages, driving the cost of construction higher.
The weekly mortgage application survey tracks week to week changes in new purchase and refinance mortgage application submissions. After several strong weeks, the weekly mortgage application survey pulled back for the week ending 8/23, with a composite decrease of 6.2%. Segmented, refinance applications declined 8.0% and new purchase applications declined 4.0%. Although mortgage rates have been on a downward trend this summer, they increased slightly last week following volatile trade talks and greater global economic uncertainty.
The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million workers nationwide. Though the data subset is limited to private sector businesses, this report still reflects greater employment trends. In July, the ADP employment report added more jobs than expected, with the addition of 156,000 jobs. Chief economist at Moody’s Analytics, Mark Zandi commented, “job growth is healthy, but steadily slowing down. Small businesses are suffering the brunt of the slowdown.”
This summer saw a boost in mortgage activity due to lower rates. Another rate cut may be coming in September, depending on economic conditions. With today’s low rates, many homeowners could benefit from a refinance even if they recently purchased their home. If you want to compare your current payment to today’s lower rate environment, check out our mortgage calculator.
Sources: CNBC, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily