THE BASIS POINT

Housing Fundamentals Soft.

 

MBA Mortgage Applications (week ended 6/24/2016)

– Purchase Index Week/Week -3.0%. Previous weeks were -2.0%, -5.0%, +12.0%, -5.0%, +5.0%, -6.0%, +0.4%, +1.0%, -2.0%, -1.0%, +8.0%, -2.0%, and +2.0%.
– Refinance Index Week/Week -2.0%. Previous weeks were +7.0%. -1.0%, +7.0%, -4.0%, +0.4%, +1.0%, +0.5%, -6.0%, -5.0%, +3.0%. +11.0%, +7.0%, and -3.0%.
– Composite Index Week/Week -2.6%. Previous weeks were +2.9%, -2.4%, +9.3%, -4.1%, +2.3%, -1.6%, +0.4%, -3.4%, -4.1%, +1.3%, +10.0%, and +2.7%.

Purchase applications and home sales do not respond to the relatively small changes we have in rates from week to week. Three consecutive week of lower purchase application in June are
not a sign of a healthy housing market.

 

 

Pending Home Sales Index (May 2016)

– Pending Home Sales Index month/month -3.7% . Previous was +3.9%.

This is a leading indicator of Existing Home Sales. Home Sales are being held down by debt-laden consumers, tougher mortgage qualifying, a general lack of confidence in the economy and,
by implication, future income.

 

 

Personal Income and Outlays (May 2016)

– Personal Income month/month +0.2%. Previous was +0.5%
– Consumer Spending month/month +0.4%. Previous was +1.1%
– PCE Price Index month/month +0.2%. Previous was +0.3%
– Core PCE price index month/month +0.2%. Previous was +0.2%
– PCE Price Index year/year +0.9%. Previous was +1.1%
– Core PCE price index year/year +1.6%. Previous was +1.6%

April had large gains so the fact that the May change was lower is not surprising.

 

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