MetroIntelligence Economic Update by P. DUFFY
Purchase loans slip 0.2 percent from previous week, but up 28 percent year-on-year
The Market Composite Index decreased 2.0 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 0.2 percent (but up 28 percent year-on-year) and refinance activity falling 3 percent (but up 40 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.08 percent.
July construction spending flat, but YTD spending up 4% vs. 2019
Construction spending during July 2020 was up 0.1 percent from June but down an equal amount year-on-year. During the first seven months of this year, construction spending amounted to $792.6 billion, up 4.0 percent for the same period in 2019.
July home prices up 5.5% year-on-year, highest gain in nearly two years
National home prices increased 5.5 percent year over year in July 2020, according to the latest CoreLogic Home Price Index (HPI®) Report. The July 2020 HPI gain was up from the July 2019 gain of 3.4 percent and was the highest year-over-year gain since August 2018. Strong demand, low mortgage interest rates and low supply of for-sale homes helped push home prices higher in July. Still, the economic downturn that started in March 2020 is predicted to slow the HPI increase to 0.6 percent by July 2021, which would be the lowest increase in annual home prices since February 2012.
August PMI manufacturing index rises 1.8 points to 56.0 as factories reconfigure to safety restrictions
The August PMI® registered 56 percent, up 1.8 percentage points from the July reading of 54.2 percent. This figure indicates expansion in the overall economy for the fourth month in a row after a contraction in April. Survey Committee members reported that their companies and suppliers operated in reconfigured factories, with limited labor application due to safety restrictions. Panel sentiment was generally optimistic (1.4 positive comments for every cautious comment), though to a lesser degree compared to July.