MetroIntelligence Economic Update by P. DUFFY
Purchase loan apps soar 25% in first year of 2023, but down 35% year-on-year
The Market Composite Index for mortgage applications increased 27.9 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 25 percent (but down 35 percent year-on-year) and refinance activity rising 34 percent (but down 81 percent year-on-year). The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.23 percent from 6.42 percent, the lowest rate since last September and nearly a full percentage point below last year’s high.
January builder confidence rises 4 points to 35, ending string of 12 straight monthly declines
Builder confidence in the market for newly built single-family homes in January rose four points to 35. A modest drop in interest rates helped to end a string of 12 straight monthly declines in builder confidence levels, although sentiment remains in bearish territory as builders continue to grapple with elevated construction costs, building material supply chain disruptions and challenging affordability conditions. The HMI index gauging current sales conditions in January rose four points to 40, the component charting sales expectations in the next six months increased two points to 37 and the gauge measuring traffic of prospective buyers increased three points to 23.
Inflation tracker Producer Price Index falls 0.5%in December, annual increase declines to 6.2%
The Producer Price Index for final demand declined 0.5 percent in December but was up 6.2 percent year-on-year. In December, the decrease in the final demand index can be attributed to a 1.6-percent decline in prices for final demand goods. In contrast, the index for final demand services rose 0.1 percent. Prices for final demand less foods, energy, and trade services edged up 0.1 percent in December, and was up 4.6 percent year-on-year.
