Market Forecast: Existing Home Sales, Mortgage Applications, Consumer Sentiment Index
Mortgage rates trended slightly downward last week. This week will be a short week with markets closed on Thursday in observance of Thanksgiving, and the New York Stock Exchange closing early on Friday. In housing news, existing home sales comes out on Tuesday and the weekly mortgage application survey comes out Wednesday. The consumer sentiment index is also scheduled for release on Wednesday.
Existing home sales or resales make up the majority of real estate transactions. In September, existing home sales improved 0.7% month-over-month, but declined 1.5% year-over-year to a level of 5.390 million. The housing market has faced limited inventory lately, leading to home price appreciation and a competitive housing market.
The Mortgage Bankers Association (MBA) mortgage application survey is a weekly report on new purchase and refinance applications filed. For the week ending 11/17, new purchase applications increased slightly, up 0.4%, and refinance applications are up 6.0% after several weeks of declines.
The University of Michigan’s consumer sentiment index is based on a survey of 500 households nationwide. Although the sentiment index is based on perceptions, it is a strong predictor of consumer spending, which accounts for two-thirds of economic activity. The estimate earlier in the month dropped to a level of 97.8, after surging in October.
Last week, the House passed the GOP tax reform proposal, with a vote along party lines. A revised version of the bill is still going through the Senate. Congress is under pressure to finalize tax reform legislation before the end of the year.
Sources: Bloomberg, MarketWatch, Mortgage News Daily, The New York Times