Daily Economic Update: CoreLogic Price Index And Mortgage Applications

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the CoreLogic Price Index and Mortgage Purchase Applications.

• A heavy data day shows a mixed picture of activity in June and July that seems to suggest that growth is continuing, but not very rapidly. One bright spot came from CoreLogic’s data which showed that home prices increased for the third month in a row, but even this news is tempered by the year over year performance which is still a slight decline in prices.
• Mortgage applications increased 7.1 percent from one week earlier driven by a 7.8 percent increase in refinances and a 5.1 percent increase in purchases. A decrease in 30-year fixed rate mortgages to 4.45 percent likely spurred some of the refinancing. Compared to a year ago, the purchase index is up 6.3 percent while refinance applications are down nearly 30 percent.
• While mortgage applications are an indicator of home sales, all cash purchases, which have accounted for 29 percent of sales in June, are not picked up in demand for mortgages.
• In other data news, payroll processing firm ADP showed growth of 114,000 in nonfarm private business payrolls. ADP data foreshadows the BLS Employment Situation release on Friday and in the last 2 years has typically underestimated the private payroll increase reported by the government, but in June government data showed 88,000 fewer job gains. Directionally, when the ADP report shows an increase, the government report has also shown an increase, so expect private sector job gains on Friday though these gains may not be large enough to offset the recent trend of government payroll job declines.
• In other news, ISM data showed that while non-manufacturing sectors continued to grow in July, they did so at a slower rate than in June. Business Activity was growing at a faster rate, but new orders and employment grew at a slower rate. By industry, 13 including Real Estate reported growth while 5 including Construction reported contraction in July.
• A heavy data day shows a mixed picture of activity in June and July that seems to suggest that growth is continuing, but not very rapidly.
• Mortgage applications increased 7.1 percent from one week earlier driven by a 7.8 percent increase in refinances and a 5.1 percent increase in purchases. A decrease in 30-year fixed rate mortgages to 4.45 percent likely spurred some of the refinancing. Compared to a year ago, the purchase index is up 6.3 percent while refinance applications are down nearly 30 percent.
• While mortgage applications are an indicator of home sales, all cash purchases, which have accounted for 29 percent of sales in June, are not picked up in demand for mortgages.
• In other data news, payroll processing firm ADP showed growth of 114,000 in nonfarm private business payrolls. ADP data foreshadows the BLS Employment Situation release on Friday and in the last 2 years has typically underestimated the private payroll increase reported by the government, but in June government data showed 88,000 fewer job gains. Directionally, when the ADP report shows an increase, the government report has also shown an increase, so expect private sector job gains on Friday though these gains may not be large enough to offset the recent trend of government payroll job declines.
• In other news, ISM data showed that while non-manufacturing sectors continued to grow in July, they did so at a slower rate than in June. Business Activity was growing at a faster rate, but new orders and employment grew at a slower rate. By industry, 13 including Real Estate reported growth while 5 including Construction reported contraction in July.
• Factory orders, reported by the Census, showed a decline in July of 0.8 percent after growth of 0.6 percent in May. The decline in orders came from durable-goods manufacturers. Non-durable goods orders were flat in June. Factory orders bounce around quite a bit from month to month. Compared to one year ago, orders are up nearly 13 percent for all manufacturing, nearly 8 percent for durable goods and more than 17 percent for non-durable goods.