Market Forecast: ADP Employment, Pending Home Sales, and Construction Spending
Mortgage rates hit year-long highs last week, breaking the 4% mark according to some sources. This month brought positive housing reports building momentum to close out the month strong. Coming this week are the ADP Employment report, pending home sales, and construction spending.
ADP Employment report measures private sector payroll jobs. Job growth is a key housing market influencer, because the ability to spend and finance a high-dollar purchase, like a home, depends on gainful employment. October reported a gain of 147,000 jobs, which although positive fell short of expectations.
Pending home sales measures the number of homes under contract, but not closed deals. This report forecasts the direction in which the housing market is headed. From September to October, pending home sales were up 1.5%.
Construction spending unexpectedly dropped in September, down 0.4%. This metric measures construction confidence and takes the economic temperature for future construction projects. Major political events like elections tend to slow construction spending.
Mortgage rates have increased significantly but appear to be starting to level out. Even with rates on the rise, they are still at historic lows respectively. Until May 2010, a 30-year fixed mortgage rate below 5% was uncommon.
Sources: Mortgage News Daily, Bankrate, Bloomberg, Reuters, CNBC, MarketWatch, MarketWatch