Blog posted On November 11, 2019
There are no economic events scheduled today in observance of the Veterans Day holiday. On behalf of everyone at our organization, we’d like to thank our Veterans and active-duty military for their service to our country. The only significant housing report scheduled for this week is the Mortgage Bankers Association (MBA) weekly mortgage application survey scheduled for release on Wednesday. Other market-moving reports include the consumer price index and retail sales.
The weekly mortgage application survey returned mixed results for the week ending 11/1. New purchase application submissions dropped 3.0% and refinance application submissions improved 2.0% for a composite increase of 0.1%. Although lower mortgage rates have triggered some mortgage activity, many buyers are still facing crowded market, especially first-time home buyers.
The consumer price index tracks changes in the average price level of a fixed basket of goods and services and is a key inflationary gauge used by the Federal Reserve to set interest rate policy. In September, the consumer price index showed no change month-over-month and increased 1.7% year-over-year. Excluding more volatile food and energy price, the index was up 0.1% month-over-month and 2.4% year-over-year. The data shows, rising costs of food and rent have been offset by lower energy and used vehicle cost, suggesting inflation has cooled.
Retail sales track total receipts at stores that sell final merchandise to consumers. Consumer spending is one of the biggest drivers of economic growth and accounts for two-thirds of total Gross Domestic Product (GDP). In September, retail sales dropped 0.3% month-over-month. Retail sales excluding vehicles dropped 0.1%, and retail sales excluding gas and vehicles were unchanged. Slower retail sales may be a result of slowing economic growth and global trade tensions.
With overall economic slowdown, the Federal Reserve is likely to leave interest rates unchanged at its last meeting of the year. With three rate cuts this year, mortgage rates are historically low. Home buyers looking to purchase or homeowners looking to refinance can benefit from today’s low rates. If you have any questions about what you could qualify for, please let me know.
Sources: CNBC, CNBC, CNBC, Econoday, MarketWatch, Mortgage News Daily