Mortgage Economic Review: June 2019


Angst on Wall Street soared in May as tensions with China and Mexico heated up. Trade negotiations between China and the United States broke off suddenly, rattled the markets, and sent stock charges on a roller coaster all month. Also, President Trump threatened new tariffs on Mexico because of the migrant situation at the border. The one big sticking point was Chinese espionage, especially the Chinese telecom manufacturer Huawei (reported Wah-Way). The U.S.

Positioned intense restrictions towards Huawei, making it almost impossible for the organization to sell its products within the US. If a complete-blown Trade War develops, permit’s not neglected that China is maintaining US debt to the tune of $1.12 trillion – which they can use to retaliate in a Trade War. However, China can’t hurt the US excessively – to stay Economically wholesome, China wishes US Consumers to buy their products. This month’s Mortgage Economic Review summarizes Key Economic Data crucial to Mortgage and Real Estate Professionals.


Interest Rates and Fed Watch

The ultimate FOMC Meeting concluded on May 1st, with the FOMC Minutes launched on May 22nd. Reading the Minutes, you get the impact that most Fed Governors want to keep Interest Rates steady. The Fed has remained non-committal about their next pass, but they’ve reiterated they may be “patient” and “information established.” Fed Speak translation: they may be in no hurry to raise or lower Interest Rates anytime soon as they retake a seat and watch the Economic Data roll in. In that manner, they’re watching inflation and the all-vital yield curve close to inverting. They also monitor trade tensions, Stock Market volatility, oil expenses, and European Economic stability. The next FOMC Meeting begins June 18th, and Fed Watchers don’t count on any adjustments in Interest Rates – however, odds of an Interest Rate cut earlier than year cease have extended and, at the moment, are at eighty-five.

Housing Market Data Released in May 2019

Another month of mixed Economic Data from the Housing Market. With interest rates lower and a robust labor market, the housing market ought to have an outstanding spring buying season; however, it’s just good enough. Most Loan Officers I’ve talked to say they may be busy with each Refi and Purchase transaction. Plus, they are seeing a growth in 1st Time Buyers. The dip in interest rates and softening domestic costs have helped affordability, so standard spring shopping may also expand into the summer and fall seasons. If rates remain low, we should see a busy purchase and refi marketplace all year.

Existing Home Sales (closed deals in April) fell 0.4% to an annual rate of five, a hundred ninety,000 houses, now down four. Four within the last three hundred and sixty-five days. The median charge for all types of homes is now $267,300 – up 3.6% from a year ago. The median single-family home rate is $269 three hundred and $251,000 for a rental. First Time Buyers have been 32%, Investors sixteen%, and Cash Buyers 20%. Homes had been available on the market for an average of 24 days, and fifty-three had been there for less than a month. Currently, 1,830,000 homes are for sale, up from 1,800,000 a year ago.

New Home Sales (signed contracts in April) fell by 6.Nine to a seasonally adjusted annual price of 673,000 homes. The median New Home rate becomes $342 two hundred, and the common New Home rate was $393 seven hundred. The number of new homes for sale is expected to be 332,000 devices, which is a five. Nine-month supply.

Pending Home Sales Index (signed contracts in April) fell 1.5% to 104.Three from one zero five.Nine the prior month.

Housing Starts (excavation started in April) rose five.7% to a seasonally adjusted annual price of 1,235,000 devices – down 2.Five% YoY. Single-family housing Starts rose 6.2% to an annual pace of 854,000 gadgets – down 4.3% YoY.

Building Permits (issued in April) rose to zero.6 % to an annual adjusted rate of 1,296,000 – down five.Zero% YoY. Single-family permits fell four.2% to 782,000 devices – down nine.Four% YoY.

Housing Completions (finished in April) fell 1.4% to an annual rate of 312,000 devices – up 5.Five within the final 365 days. Single Family Completions were down 4.1% to 918,000 devices – up to sixteen—6% YoY.

Labor Market Economic Data Released in May 2019
The Labor Market maintains its robust pace. The Bureau of Labor Statistics stated the Economy added 263,000 new jobs during April (a hundred ninety 000 expected). The economy brought one hundred seventy,000 new jobs every month for the last three months. Unemployment dropped to three.6% – the bottom rate in 50 years, and there are now an expected 750,000 to one million unfilled process openings. Where were the new jobs created? Four 000 were in production, 33,000 in creation, seventy-six 000 in enterprise services, seventy-six 000 in schooling/fitness, 34,000 in hospitality, eleven 000 in transportation, and 27,000 in government. Retail lost 12,000 jobs – bypass down to the Consumer segment and read approximately keep closings.

The Economy delivered 263,000 new jobs in April.

The Unemployment Rate fell to three.6% from three.8% the prior month.

The Labor Force Participation Rate fell to sixty two.8% from 63.Zero the previous month.

The Average Hourly Wage rose 0.2% in April and 3.2% YoY.

Inflation Economic Data Released in May 2019

Another month of inflation information is coming in with a decrease than predicted. Inflation rose slightly in April because of higher gas, refuge, and health care charges. Shelter expenses, which include a 3rd of the CPI, rose to zero.Four% (3.Four%YoY), electricity expenses up to five. Four (2.9% YoY) and health care is up zero.3% (2. Three YoY). Clothing charges were rapidly declining for the previous couple of months. They dipped to zero at eight this month after falling 1.9% the prior month. New Car costs rose 0.1% even as Used Car prices declined 1.Three% – the 0.33 direct month of charge decline for Used Cars. Inflation has been modest, considering it has been the tightest labor market in 50 years. The Fed believes this recent lull in Inflation is “transitory” and expects it to boom in the future. Sooner or later, higher wages will translate into better inflation, but it would not seem like a way to take place quickly.

CPI rose to zero.3%, now up 2.0% in the remaining 365 days.

Core CPI (ex-meals and power) rose zero by 14% and is now up the simplest 2.1% in the last 12 months.

PPI rose 0.2%, now up 2.2% in twelve months.

Core PPI (ex-meals & electricity) rose 0.1%, up 2.Four in the last three hundred and sixty-five days.

GDP Economic Data Released in May 2019

The 2nd estimate of 1st Quarter 2019 GDP confirmed the Economy expanded at a three.1% annual price (3.0% anticipated). That is a slight revision from the primary estimate of 3.2% for the final month. The economy continues to chug along mainly while you consider the first quarter to normally have a slower increase due to bloodless weather in many of your lives. S. A .. 1st Quarter GDP information reflects growth in Consumer spending, state and nearby authorities’ spending, exports, inventories, and business construction, while Federal authority’s spending, commercial enterprise gadgets, and residential construction reduced.

Consumer Economic Data Released in May 2019

Retail sales information remained weak in 2019 as consumers kept pinching their pennies. Consumers reduce again on buying motors, electronics, and clothing. Gasoline Sales turned up. However, that becomes because of better gas fees. This isn’t always top information for stores already hurting from online competition. A long way this year, over 7,000 store closures were introduced, after 5,500 save closures in 2018. Speaking of online income – they have been down, too. With such a robust labor market and a 50- 12-month low unemployment, you would anticipate consumers spending more on items and houses.