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Week In Review – March 29, 2018

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Week In Review

Volume 24, Number 12

Reginald J. Smith, Community Development Manager – Bank of Kansas CityReginald J. Smith

Economic Highlights for Week Ending March 29, 2018

 

MONDAY, March 26th

The S&P CoreLogic Case-Shiller 20-city home price index rose 0.8% in January on a monthly, seasonally adjusted basis and posted a 6.4% year-over-year gain, up from 6.3% in the previous month. All 20 major metro areas tracked by this index posted house price gains over the past year led by Seattle at 12.9%, followed by Las Vegas at 11.1% and San Francisco at 10.2%. David M. Blitzer, Managing Director and Chairman of the index noted Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing. He went on to say Despite limited supplies, rising prices, and higher mortgage rates, affordability is not a concern.

TUESDAY, March 27th

The Conference Boards consumer conference index fell to 127.7 in March from a reading of 130.8 in February. Ratings for both the present situation and expectations for the future pulled back a bit. Despite the decline though, consumer confidence levels remain high indicating strong consumer optimism. Details in the data showed strong assessments of the labor market, lower inflation expectations and softer purchasing plans. The tax cuts this year appear to have offset trouble in the stock market which continues to support consumer confidence readings.
UFSC Week In Review

WEDNESDAY, March 28th

The MBA mortgage applications index rose 4.8% for the week ending March 23. The gain was led by a 7.3% increase in the refinance index; the purchase index was up 3.1% on the week. Contract mortgage interest rates continued to climb with the 30-year fixed rate for conforming mortgages up 1 bps to 4.69%.

The pending home sales index rebounded last month but remained lower on a yearly basis. Pending home sales rose 3.1% in February to 107.5 but the index was down 4.1% from February 2017. The pending home sales index tracks the number of signed sales contracts and is considered a leading indicator of existing home sales. Based on the gain last month and the current level of the index existing home sales are expected to improve in the next couple of months from subdued sales in the previous couple of months.

THURSDAY, March 29th

Jobless claims dropped 12k to 215k for the week ending March 24. This marks the lowest level for initial claims since January 27, 1973. The 4-week average is down slightly to 224,500 and in line with February’s trend. Based on these data, the March employment report is expected to show another strong month of job creation.

House prices rose 6.6% on a year-ago basis in December, according to the Black Knight House Price Index. December marked the 68th consecutive month of annual price appreciation. House prices fell in nine of the 20 largest states in the U.S. and hit new peaks in six others. Prices for existing single-family homes continue to rise as buyers contend with tight inventories.

Personal income grew at a 0.4% pace in February following the same gain in January. In a sign of increasing compensation, wages and salaries rose a strong 0.5% last month. Even amid strengthening income growth, consumer spending was weak, up just 0.2% on the month. Solid income growth and slow spending helped the saving rate increase 0.2% to 3.4%. A closely watched inflation gauge contained in this data series, the core PCE price deflator rose 0.2% last month and is now up 0.1% to 1.6% on the year. Inflation remains tepid but is moving in the right direction for the Fed who will continue raising rates and removing economic stimulus on a gradual basis this year.

FRIDAY, March 30th

GOOD FRIDAY
All Markets Closed

Stock Market Close for the Week


Index

Latest

A Week Ago

Change



DJIA
24,103.11
23,533.20
+569.91 or +2.42%


NASDAQ
7,063.45
6,992.67
+70.78 or +1.01%


WEEK IN ADVANCE

After a week of mostly housing market related data, reports in the coming week wrap up the sector for the month. Watch for new home sales and pending home sales, both on next week’s calendar.


Key Interest Rates

Latest

6 Mos Ago

1 Yr Ago



Prime Rate
4.75%
4.25%
4.00%


Fed Discount
2.25%
1.75%
1.50%


Fed Funds
1.68%
1.16%
0.91%


11th District COF
0.777%
0.707%
0.616%


10-Year Note
2.74%
2.28%
2.40%


30-Year Treasury Bond
2.97%
2.83%
3.01%


30 -Yr Fixed (FHLMC)
4.44%
3.83%
4.14%


15 -Yr Fixed (FHLMC)
3.90%
3.13%
3.39%

6-Mo Libor (FNMA)
2.22375%
1.45389%
1.37489%

Sources: IBC’ s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

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