Blog posted On November 12, 2018
Some markets are closed today in observance of Veterans Day, which was yesterday. This week, the only significant housing news to report will be the Mortgage Bankers Association weekly mortgage application survey. Other market moving reports include the consumer price index and retail sales.
The MBA weekly mortgage application survey tracks week to week changes in new purchase and refinance mortgage applications. For the week ending 11/2, new purchase applications declined 5.0% week-over-week and refinance applications declined 3.0% week-over-week, for a composite decrease of 4.0%. MBA chief economist attributed the decline to limited housing inventory, stating, “housing supply has been quite constrained for several years. As a result, the housing market has been out of whack, with home prices increasing at twice the rate of income growth. That was not sustainable.”
The consumer price index measures changes in the prices of a fixed basket of goods and services. Core CPI excludes the more volatile food and energy components. In September, consumer prices increased less than expected, rising 0.1% month-over-month. Excluding food and energy, core CPI increased 0.1% month-over-month and 2.2% year-over-year. Rental rates increased less rapidly, and energy prices fell, indicating inflation has started to cool.
Retail sales track total receipts of goods and services sold at stores to final consumers. Consumer spending is a big driver of economic growth, and accounts for two-thirds of Gross Domestic Product (GDP). In September, retail sales increased 0.1% month-over-month and 4.7% year-over-year. Excluding vehicles, gas, building materials, and food services, retail sales were up 0.5% month-over-month. The modest overall gain might be due to a big drop in spending at restaurants and bars, although vehicle purchases increased significantly.
Heading into the fall and winter months, home buying and selling activity tends to slow down, making it one of the best times to buy. With less competition, home buyers may have more power to negotiate with sellers on a timeline. If you’re interested in buying a home this fall or winter, get preapproved for mortgage financing before you make an offer. Ensuring a quick transaction makes you an even more attractive buyer.