Economic Updates

The National Association of Home Builders/Wells Fargo housing market index rose three points in May to 22. It was the highest reading since August 2007. An index reading below 50 indicates negative sentiment about the housing market.

The combined construction of new single-family homes and apartments in April rose 5.8% to a seasonally adjusted annual rate of 672,000 units. Applications for new building permits, seen as an indicator of future activity, fell 11.5% to an annual rate of 606,000 units.

The producer price index, which tracks wholesale price inflation, fell 0.1% in April, following a 0.7% increase in March. Economists had expected a 0.1% rise. For the year, wholesale prices are up 5.4%.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending May 14 fell 1.5%. Refinancing applications jumped 14.5%. Purchase volume decreased 27.1%.

Consumer prices fell a seasonally adjusted 0.1% in April, following a 0.1% increase in March. It was the first decline since March 2009. On a year-over-year basis, consumer prices at the core rate — excluding volatile food and energy prices — were up 0.9%, the smallest increase since January 1966.

Initial claims for unemployment benefits unexpectedly rose by 25,000 to 471,000 for the week ending May 15. Continuing claims for the week ending May 8 fell by 40,000 to 4.625 million.

The index of leading economic indicators — designed to forecast economic activity in the next three to six months — fell 0.1% in April, after a revised 1.3% gain in March. It was the first decline since March 2009.

Upcoming on the economic calendar are reports on existing home sales on May 24, the housing price index on May 25 and new home sales on May 26.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pky., Suite 104
woodbridge, VA 22192

Office: (703) 590-7132