Mortgage rates increased five basis points last week, according to the Freddie Mac Primary Mortgage Market Survey released on November 6th. This is the first uptick in the past five weeks, but it is still well below the rates that we saw for the first half of the year and much of the summer. On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving.
Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 31st. “Mortgage rate movements were mixed last week as Treasury yields moved slightly higher following last week’s FOMC meeting. The 30-year fixed rate was mostly unchanged and remained close to the lowest level in over a year,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Despite a decline last week, refinance applications are still significantly higher than a year ago. The average loan size for refinance applications was at its highest level in six weeks, as borrowers with larger loans continued to seek ways to lower their monthly payments. Purchase applications declined slightly from a week ago; however, there was a slight increase in FHA purchase applications as prospective homebuyers continue to seek loan options to help manage challenging affordability conditions.”
U.S. manufacturing contracted for an eighth straight month in October as new orders remained subdued, and suppliers were taking longer to deliver materials to factories against the backdrop of tariffs on imported goods. Accounts from manufacturers in the Institute for Supply Management survey on Monday painted a dire picture of the factory sector. Makers of computer and electronic products noted last month that the cost to import in many cases is still more attractive than sourcing within the U.S. “Tariffs have been roiling the sector for much of this year,” said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets. “The comments from individual respondents suggest that firms are exhausted by all of the back and forth on tariffs since the beginning of April and are suffering mightily as their customers have pulled back significantly.”
New data sources bring new inspiration as the government shutdown has not only placed more emphasis on the alternative data that was already in the rotation but also fueled interest in new sources. One that you’ll likely hear more about in the coming months is Revelio Labs, a company using data aggregation and modeling to synthesize its own version of nonfarm payrolls. While it’s far from an exact match, the trends are similar, and Revelio’s data is less volatile, much like ADP payroll data has always been.
