MortgageTime Mortgage Market News for the week ended January 18, 2019
By Anonymous
Friday, January 18, 2019
| Due to the government shutdown, there was little major economic data released this week, and mortgage rates ended slightly higher. |
| This week was more notable for the economic reports which did not get released rather than the ones that did. Tuesday's Retail Sales report became the most significant data so far to be delayed by the government shutdown which began on December 22. Since consumer spending accounts for about 70% of all economic activity in the U.S., the retail sales data is a key indicator of growth, and this month's report was particularly important because it covered the holiday shopping season in December. The report on housing starts during the month of December also was postponed. It is generally not known in advance whether impacted data will be released as scheduled or how long it will be delayed. |
| The lack of several key pieces of economic data has left investors and Fed officials flying blind to a degree. Under the best of circumstances, it is extremely difficult to determine the pace of economic growth, and missing information compounds the problem. On top of this, the shutdown adds another layer of complexity which involves separating the temporary effects of reduced spending from out of work government employees and the underlying trends in economic activity. |
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One monthly housing report released by an outside source contained positive news. After a couple of months of declines, the National Association of Home Builders (NAHB) housing index showed that home builder confidence increased in January from 56 to 58, above the consensus for a flat reading of 56. Levels above 50 are viewed as positive.
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| According to the NAHB, declining mortgage rates in recent weeks boosted the results, and "low unemployment, solid job growth, and favorable demographic trends" provide a solid foundation for future activity. |
| As expected, the British Parliament rejected a Brexit (British exit from the European Union) deal proposed by Prime Minister Theresa May on Tuesday. The UK is scheduled to leave the EU on March 29, and a wide range of key issues about the terms of the departure remain unresolved. The vote caused little reaction in U.S. financial markets. |
| Looking ahead, Existing Home Sales will be released on Tuesday and New Home Sales on Friday. Durable Orders, an important indicator of economic activity, also will come out on Friday. In addition, the next European Central Bank (ECB) meeting will take place on Thursday and could influence U.S. mortgage rates. Mortgage markets will be closed on Monday in observance of MLK Day. |
