Market Forecast: Construction Spending, Mortgage Apps, and ADP Employment
Last week, the Federal Open Market Committee (FOMC) voted to leave the Federal benchmark interest rate unchanged, signaling mortgage rates will likely continue to stay historically low. This week, both US construction spending and the Mortgage Bankers Association (MBA) weekly mortgage application survey are scheduled for release. Another market-moving report will be the ADP employment report.
US construction spending tracks total spending on public and private construction projects. In November, construction spending increased 0.6% month-over-month at an annual rate of $1.32 trillion. Residential construction specifically increased 1.9%. Higher buyer demand will likely continue to trigger new home construction activity, especially with many markets grappling with limited for-sale inventory.
The weekly mortgage application survey tracks week to week changes in the submission of new purchase and refinance mortgage applications. For the week ending 1/24, new purchase application submissions increased 5.0% and refinance application submissions increased 8.0% for a composite increase of 7.2%.
In December, the ADP employment report exceeded expectations with the addition of 202,000 jobs. Small businesses added 69,000 jobs, mid-size companies added 88,000 jobs, and large firms added 45,000 jobs.
New home construction, low mortgage rates, and a strong job market will likely propel mortgage activity into 2020. Many homeowners, even those that purchased a home within the past few years, may benefit from a mortgage refinance with today’s low rates. If you have any questions about refinancing your current home loan or if you are considering a home purchase, let us know.
Sources: Builder Magazine, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily