MORTGAGE BLOGPosted On October 03, 2016
The mortgage rate drops slightly since last week opening up at a lower rate. Friday’s “locking market” advisory comes as a result of higher stocks and lower Mortgage Bonds. We start the month with reports on Construction Spending this Monday and the ADP Employment report on Wednesday. Analysts are also warning of an “October Surprise” that may be detrimental to stock prices.
Construction spending has failed to grow in July, ending with a 3.1% drop in public construction and only a 1% growth in private construction. We predict some of the weakness could be offset by better construction activity in the housing market, projecting a 0.3% increase in August.
ADP Private Employment is expected to report a gain of 155,000 jobs in September. This report measures non-farm private sector employment using an anonymous subset of 400,000 US businesses who are also clients of ADP. Traditionally any improvement with income and employment rate relays into an improvement in the housing market, so we will be watching these metrics closely.
October is historically a volatile month for stocks. Deutsche Bank declines and other high-profile overseas banks like Credit Suisse have the potential to shake up both European and US financial markets. Plus, the US market continues to suffer outflows, making October the 18th month in a row of outflows.
The market has a busy week ahead with analysts at Nomura stating, “we expect data for September to show that economic activity expanded at a better place following a broad-based slowdown in August.” Tune in this Friday for a Market Recap.
Sources: MarketWatch, FXStreet
