Blog posted On December 06, 2019
Mortgage rates trended lower this week, ahead of next week’s Federal Open Market Committee (FOMC) meeting. This week, the US construction spending report showed overall construction investment slowed in October. New purchase mortgage application submissions increased but refinance application submissions declined. The ADP employment report was lower than expected.
US construction spending declined 0.8% month-over-month in October to a seasonally adjusted annual rate of $1.29 trillion. Spending on private construction declined 1% driven by a drop in residential construction spending, down 0.9%. Spending on public projects declined less significantly, down 0.2% month-over-month. Despite October’s lower numbers, both September and August’s figures were revised upwards.
The weekly mortgage application survey returned mixed results for the week ending 11/29. New purchase mortgage application submissions increased 1.0% and refinance mortgage application submissions declined 16.0% for a composite decrease of 9.2%. The shortened holiday week may have impacted the data with markets closed last Thursday in observance of the Thanksgiving holiday.
The ADP employment report showed the addition of only 67,000 jobs in November, much fewer than expected. Small businesses added 29,000 employees, mid-size firms added 27,000 employees, and large companies added 25,000 jobs. Chief economist for Moody’s Analytics, Mark Zandi, commented on the impact of the trade war, “the slowdown is more significant than I would have thought […] the trade war is doing damage to the economy and the jobs market.”
Next week, the FOMC is not expected to make any interest rate moves. After three rate hikes this year, mortgage rates are historically low. Many homeowners can benefit from a refinance even if they bought their home recently. If you have any questions about refinancing your home loan, let me know.