Blog posted On July 01, 2019
Mortgage rates continue to trend lower. This week in housing news, US construction spending comes out on Monday followed by the Mortgage Bankers Association (MBA) weekly mortgage application survey on Wednesday. Other market-moving reports include the ADP employment report.
US construction spending tracks total spending on private and public construction projects. In April, construction spending was unchanged month-over-month, and down 1.2% year-over-year. Private sector spending was down but spending on government projects was up.
The Mortgage Bankers Association (MBA) weekly mortgage application survey was mixed for the week ending 6/21. New purchase application submissions declined 1.0% and refinance application submissions are up 3.0%, for a composite increase of 1.3%. Joel Kan, MBA’s associate vice president of economic and industry forecasting, commented, “Mortgage rates dropped again for most loan types, which led to an increase in refinance activity, partly driven by a 9% jump in VA applications.”
The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million US workers. Private sector employers hired just 27,000 workers in May, much lower than expected. Small businesses actually cut 52,000 jobs. Medium-sized firms added 11,000 jobs and large companies added 68,000 jobs;
Lower mortgage rates are continuing to incentivize would-be buyers to make a purchase, and homeowners to refinance their current mortgages. The data is supportive of a strong purchase market. Existing home sales improved in May, but new home sales declined, with many buyers choosing less expensive existing inventory versus building a new home. Kan stated, “Now at almost the halfway mark of 2019, we have generally seen a stronger purchase market than last year, despite still-tight existing inventory and insufficient new construction.”