Blog posted On December 10, 2018
Mortgage rates have trended slightly downward this month, heading into the slower home buying and selling season. The only significant housing report of the week will be the Mortgage Bankers Association (MBA) weekly mortgage application survey. Other market-moving reports include the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) and retail sales.
The JOLTS report is an aggregation of employment data on job openings, hirings, and voluntary quits. In a healthy labor market, workers are confident they will find comparable employment if they choose to change jobs. Jobs fell slightly in September, down to a level of 7.009 million, after reaching a record high of 7.125 million the previous month. Voluntary quits declined to 3.6 million and hiring declined slightly to a level of 5.9 million. Heading into the holiday season, companies are hiring earlier than ever. Labor economist at ZipRecruiter, Julia Pollak, commented, “overall, business demand for workers remains strong.”
Mortgage application submissions have increased over the past two weeks, as home buyers and homeowners get a temporary relief from rising rates. New purchase application submissions were up 1.0% and refinance application submissions were up 6.0%, for a composite increase of 2.0% for the week ending 11/30.
Retail sales count total receipts of goods and services sold to final consumers at retail stores. Consumer spending is the biggest driver of Gross Domestic Product (GDP) growth. In October, retail sales surged, up 0.8% month-over-month. Excluding autos, sales were up 0.7% month-over-month, and excluding gas and autos, sales were up 0.3% month-over-month. Rising gas prices contributed to the spending increase, as well as rising costs of building materials and food services. Retail sales tend to increase during the holiday season.
The Federal Open Market Committee will meet next week. Although the Fed was originally expected to raise interest rates a fourth time, some forecasters are changing their predictions based on global economic trends. Mortgage rates have not moved significantly since the last rate hike, and are even trending slightly downward this month.