Market Forecast: Construction Spending, Mortgage Apps, and ADP Employment
Happy New Year! Markets will be closed today in observance of New Year’s Day. This week’s important reports include US construction spending, the ADP employment report, and the weekly mortgage application survey.
The Mortgage Bankers Association (MBA) weekly mortgage application survey counts new purchase and refinance mortgage applications. The MBA offices will reopen tomorrow, and results from the two weeks prior will be released on Wednesday.
US construction spending is a composite report of all new construction activity on residential, non-residential, and public construction projects. The housing market has been hurting because of not enough inventory for sale. New home construction increases will help replenish that inventory, and all construction activity spurs economic momentum. In October, total construction spending increased 1.4% month-over-month and 2.9% year-over-year.
The ADP employment report is based on data from 400,000 private businesses employing 23 million workers. Job creation drives economic activity and the unemployment rate sits at a 17-year-low. In November, ADP reported that private businesses added 190,000 jobs.
Heading into 2018, housing experts expect home price appreciation to continue and a competitive market. With a spur in construction spending, housing inventory could increase. Mortgage rates are starting to trend upward and two to three rate hikes are expected next year.
Sources: Bloomberg, MarketWatch, MBA, Mortgage News Daily