Market Recap: More Job Openings, Mortgage Apps Up Again, Retail Sales Increase

Blog posted On December 14, 2018

Mortgage rates did not move significantly this week, ahead of next week’s Federal Open Market Committee (FOMC) meeting.  This week’s only significant housing report, the Mortgage Bankers Association (MBA) weekly mortgage application survey, was positive with both new purchase and refinance mortgage application submissions increasing.  Job openings are up and retail sales data signals the holiday spending season has started.  

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed a 1.7% increase in job openings in October, still near August’s record high.  Job openings reached 7.079 million, hirings are also up 3.4% to a level of 5.893 million, still slightly below openings signaling difficulty hiring skilled workers for the appropriate position.  The number of voluntary quits declined 1.4% to a level of 3.514 million.  The quits rate corresponds with wage growth, and this data shows there might not be as much opportunity for workers to move to higher paying jobs.

Mortgage activity reacted to the recent drop in mortgage rates again for the week ending 12/7.  New purchase applications are up 3.0% and refinance applications are up 2.0% for a composite increase of 1.6%. Although home buying and selling activity tends to slow down in the winter, after an exceptionally busy year, some buyers may be taking advantage of the less competitive market.  CNBC Real Estate Reporter, Diana Olick, commented, “this year may be an outlier, because more supply is coming on the market and buyers who were priced out last spring amid heavy competition are now seeing an opportunity.”

Retail spending increased in November, which includes Black Friday and Cyber Monday shopping after Thanksgiving, and October’s figure was revised upward, signaling a strong start to holiday spending season.  Retail sales are up 0.2% month-over-month, driven by spending at e-commerce and traditional big-box retailers.  Excluding gas and auto spending, retail sales are up 0.5% month-over-month.  A recent drop in gas prices has led to a slowdown in spending at the pump. 

The Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday of next week.  While most forecasters are expecting a rate hike, economic growth has started to slow. Federal Reserve Chair Jerome Powell’s Wednesday press conference will give economists an idea of what to expect in 2019.  Home price appreciation has started to slow, and if the Fed pulls back on hiking rates, mortgage rates may level off also. 

Sources: CNBC, Econoday, MarketWatch, MarketWatch, MarketWatch, Mortgage News Daily