Economists' Outlook

Housing stats and analysis from NAR's research experts.

Daily Economic Update: Mortgage Applications And Durable Goods Orders

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage applications and durable goods orders.

• Mortgage applications declined 5.0 percent for the week ending July 22, following a slight increase in interest rates on 30-year fixed mortgages from 4.54 percent to 4.57 percent.
• The seasonally adjusted Purchase index declined 3.8 percent from the previous week.
• Refinancing activity decreased 5.5 percent from the prior week.
• Though the index does not include cash purchases, which accounted for 30.0 percent in June of this year, the continuing sideway movement (and not upward movement) suggests home sales will not rebound in any meaningful way in the near term. Note that data measures applications only and not approvals, and it is unclear on the direction of the approval rate. Mortgage accessibility has been very tight, but has it become slight less onerous or even more stringent? That is unknown in the data.
• Separately, new orders for manufactured durable goods declined 2.1 percent in June, to $192.0 billion. The figure represents a second decline in the last three months. Based on this data the second quarter GDP growth is likely to be well under 2 percent, which will correspond to an unchanging unemployment rate or slight upward drift.
• Transportation equipment orders, which led the earlier growth, declined the most—8.5 percent.
• Businesses continue to ramp up their inventory levels—inventories of durable goods rose 0.4 percent, the eighteenth consecutive monthly gain. Higher inventory could mean slightly less production activity in the months ahead.

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