Housing Starts to Show Mixed Results – Market Update

I went with a few of my teammates from here at work to check out Black Panther this past weekend. Avengers: Infinity War is hitting theaters this Friday, and our partnership with the movie has me back on a comics kick.

There’s been an uptick in the stock market lately that’s at least equal to my uptick in superhero content consumption. I’m not going to claim a total correlation, but one of the movie ticket sales recorded in the retail sales numbers in March was from when I first saw Chadwick Boseman bring the Black Panther character to life.

I promise to cool it with referencing all the superheroes, but you can’t blame me for trying to make economic data a little more fun.

Headline News

Retail Sales

Retail sales were up 0.6% in March after falling slightly in February. Vehicle sales were a big reason for this bump, up 0.2% when cars and trucks were taken out.

Gas prices fell sharply in March. When these were further removed, retail sales went up 0.3% on the month. It’s also worth noting that prices of individual group categories, which excludes gas and other items, were up 0.5%.

Housing Market Index

Home builders have been just slightly less confident in the market for new homes in April as the number came in at 69, down from 70 last month.

Current sales are still strong at 75, despite being down two points. Meanwhile, future sales in the next six months were down a single point to 77. Finally, traffic of prospective buyers in new homes held steady from March at 51.

In terms of regional data, the West is the strongest region, coming in at 76 followed by the South at 72. The Midwest comes in at 64, with the South the laggard but still growing at 55.

Housing Starts

Housing starts increased 1.9% to 1.319 million units on a seasonally adjusted annualized basis in March. February revisions were also higher, coming in at 1.295 million units.

Unfortunately, the strength came solely from the multifamily housing segment, which increased to 452,000 units in March. However, single-family houses fell 3.7% in the starts category to 867,000 units.

On the permits side, these came in up 2.5% on month at 1.354 million. Single-family permits were at 840,000, 5.5% below where they were in February. Permits on the multifamily side were up 19% to 514,000.

Single-family unit construction completion was down 4.7%, with overall conclusions falling 5.1% overall to 1.217 million. The good news is housing under construction rose 0.3% to 1.125 million, the highest number since July 2007.

Industrial Production

Industrial production was up 0.5% in March. This is 4.5% higher than where it was a year ago. Manufacturing rose just 0.1%, while mining was up 1.0% as oil and gas digging were up. There was a 3.0% increase in utility production as well.

There was also more space being utilized in factories as capacity was up 0.3% to 78.0% overall in the month of March.

MBA Mortgage Applications

Mortgage applications were up 4.9% last week as the average rate on a 30 year-fixed conforming mortgage remained at 4.66%.

Purchase applications were up 6% and refinance applications were up 4%.

Jobless Claims

Initial claims were down 1,000 to 232,000 last week. On the other hand, the four-week moving average was up to 231,250, adding an additional 1,250 claims.

Continuing claims were down 15,000 to come in at 1.863 million. However, the four-week moving average was up 6,750 to come in at about 1.859 million.

Mortgage Rates

Last week, mortgage rates rose to the highest level they’ve been all year. If you’re looking to take cash out or buy and you see a rate you like, it makes sense to lock your rate.

The 30-year-fixed rate mortgage averaged 4.47% with 0.5 fees in points last week, up five basis points from the week prior. At this time a year ago, the rate was 3.97%.

In shorter terms, 15-year fixed-rate mortgages averaged 3.94% with 0.4 points. This was up seven basis points on the week. Last year, this rate was 3.24%.

Finally, the 5-year treasury-indexed hybrid adjustable rate mortgage (ARM) with 0.3 points in fees was up six basis points to 3.67%. Last year at this time, the rate was 3.10%.

Stock Market

It was a bad day for Apple stock on Friday as analysts at Morgan Stanley said iPhone sales for the June quarter will likely to fall short of investor expectations. This sent the company’s stock down 4.1% on the day and sent the Dow and Nasdaq both tumbling despite strong earnings from General Electric. Even on a bad day, it shows just how much of a tech giant Apple is.

The Dow Jones industrial average was still up 0.42% for the week despite being down 201.95 points on Friday to close at 24,462.94. The S&P 500 closed at 2,670.14 points, down 22.99 points for the day but up 0.52% on the week. Rounding things out, the Nasdaq was down 91.93 points Friday to finish at 7,146.13, still up 0.56% on the week.

The Week Ahead

Monday, April 23

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

Tuesday, April 24

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller Home Pricing Index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.

Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.

New Home Sales (10:00 a.m. ET) – This measures the number of newly constructed homes with a committed sale during the month.

Wednesday, April 25

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

Thursday, April 26

Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory hard goods.

International Trade in Goods (8:30 a.m. ET) – The Bureau of Economic Analysis has begun breaking out the goods from the remaining international trade numbers to get an idea of import and export estimates for GDP calculations.

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.

Friday, April 27

Gross Domestic Product (GDP) (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.

Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.

There’s a metric ton of economic data hitting next week that includes both new and existing home sales numbers as well as durable goods orders and GDP to give us a line on overall economic growth.

This stuff is important, but it doesn’t necessarily hold your attention on a Monday. We’ve got plenty more home, money and lifestyle content to share with you if you subscribe to the Zing Blog below.

If you’re looking for something to take your mind off the world for a while, check out this quiz that tells you which Avenger you would be based on your house preferences. Yeah, I’m having a hard time overcoming my inner child to get actual work done this week. If you’re going to see Avengers: Infinity War this weekend, enjoy the ride. Who’s your favorite Avenger? Let us know in the comments.

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