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  • Market Recap: Builder Sentiment Improves, Mortgage Apps Mixed, Housing Starts and Building Permits Decline

Market Recap: Builder Sentiment Improves, Mortgage Apps Mixed, Housing Starts and Building Permits Decline

  • July 19, 2019

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Mortgage rates are continuing to trend downward ahead of this month’s Federal Open Market Committee (FOMC) meeting.  The National Association of Home Builders’ (NAHB) housing market sentiment index improved.  New purchase mortgage application submissions declined but refinance application submissions improved.  Both housing starts and building permits declined. 

The NAHB housing market sentiment index inched upward in July, rising to a level of 65.  Current sales conditions improved to a level of 72 and expectations for the next six months also ticked up to a level of 71.  Buyer foot traffic increased to a level of 48.  Any reading above 50 is considered positive.  Although the index improved, builders are still worried about the same three issues: labor, lumber, and land.  The recent downward trend in mortgage rates may spur some buyer momentum but will not ease conditions related to more expensive land to build, lack of laborers, and trade tensions driving lumber costs up.

The Mortgage Bankers Association (MBA) weekly mortgage application survey returned mixed results for the week ending 7/12.  New purchase application submissions declined 4.0% but refinance application submissions increased 2.0% for a composite decrease of 1.1%.  Overall this month, mortgage activity has picked up as lower mortgage rates are pushing some prospective home buyers to buy and homeowners who could lower their mortgage payment to refinance.  Recent data shows, over 8 million American homeowners could save money on their mortgage with a refinance.

Housing starts are down again in June, falling 0.9% to a seasonally adjusted annual rate of 1.253 million.  Building permits also declined, down 6.1% to a seasonally adjusted annual rate of 1.220 million units.  Again, land and labor shortages likely factored into this month’s weaker data. 

With lower mortgage rates, even homeowners who originated their loans last year could benefit from a mortgage refinance.  Black Knight, a mortgage performance data and analytics firm, reports refinances for loans originated last year are up 300%.  If you have any questions about refinancing, please let me know. 


Sources: CNBC, CNBC, Econoday, HousingWire, MarketWatch, MarketWatch, Mortgage News Daily 

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