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  • On the heels of last week's better than expected consumer inflation report, new wholesale inflation data also came in better than expected.
  • Retail sales surged by 1.3% in October as consumers continued spending despite inflation, showing the economy is not yet slowing.
  • Jobless claims dropped by 4K last week despite expectations for an increase, demonstrating continued labor market strength.

Housing News

  • Housing starts were down 4.2% in October, with single-family projects dropping to the lowest level in nearly 2.5 years. Permits fell 2.4%.
  • Builders continue to lose confidence. The NAHB housing market index fell for an 11th straight month to the lowest level since June 2012.
  • Mortgage application volumes moved higher for the first time in 8 weeks, with purchase apps up 4% for the week. 

Market Minute Report - Mortgage News


  • The Fed raised policy rates by 0.75% this week and signaled that future hikes may be smaller but rates may go higher than initially expected.
  • Manufacturing neared stagnation in October as orders contracted for the 4th time in 5 months, reaching the lowest level since May 2020.
  • According to ADP, wages increased 7.7% and companies added 239K jobs in October, more than expected, showing strength in the labor market.

  • Construction spending unexpectedly rebounded in September, despite a further decline in outlays on single-family homebuilding.
  • With slightly better rates for the first time in weeks, refinance applications rose 0.2% last week. Purchase apps fell 1%.
  • Homebuyers moved a median of 50 miles last year, up from the typical 15 miles, thanks to remote work and costly metros, according to NAR. 

Market Minute Report - Mortgage News


  • Consumer confidence ebbed in October after 2 straight monthly increases, reflecting concerns about inflation and a possible recession.
  • The economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing recession fears.
  • Weekly jobless claims edged higher to 217K but were still below the 220K estimate and still signaled a strong labor market.

  • Despite cooling at a record pace in August, home prices were 13% higher nationally than last year, according to Case-Shiller.
  • New home sales fell 10.9% in September, following an unexpected gain in August. New home sales account for approximately 10% of the market.
  • Higher rates have pushed mortgage demand to nearly half of what it was last year. Last week’s purchase apps were down 42% year over year.

Market Minute Report - Mortgage News


  • Jobless claims fell last week to 214K, indicating the labor market remains tight even as demand for labor is cooling.
  • Consumer spending was basically flat in September, up only 0.4% compared to August, but retail sales were still up 8.2% from a year ago.
  • Fed members this week continued emphasizing the need to raise rates into 2023 to curb inflation, even if it causes a recession.

  • Existing home sales fell to the slowest pace since September 2012. The 8th straight month of declines came as mortgage rates continued to rise.
  • Housing starts dropped 8.1% in September, and single-family home starts fell to their lowest level in more than two years. Permits also fell 3.1%.
  • Buyers in many areas are finding bright spots in the market, including seller concessions, easier negotiations and more time to consider options.

 

Market Minute Report - Mortgage News


  • Both wholesale and consumer inflation reports showed inflation continued to rise in September despite multiple Fed rate increases.
  • The labor market remains strong. Nonfarm payrolls increased more than expected in September, and unemployment fell to 3.5%.
  • Jobless claims were up slightly last week. Claims reached their highest level since August but still showed a stable labor market.

  • Purchase mortgage applications dropped 2% for the week. The average purchase loan fell below $400K for the first time since December 2021.
  • Higher mortgage rates are creating an appetite for adjustable rate mortgages. ARMs represented about 12% of last week's applications.
  • Despite higher mortgage rates, home prices remain higher compared to a year ago and are unlikely to fall steeply due to persistently tight supply.

 

Market Minute Report - Mortgage News

 

 


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