Key Mortgage Economic Indicators and Data Released in September 2017

September 2017 Key Economic Indicators Important to Mortgage Professionals

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Mark Paoletti,


The 2017 Hurricane season has been one of the worst on record and it’s not over. October still has the potential to generate more storms. Besides the Hurricanes, a lot news hit during September: more proposed changes to the tax code, typical North Korean shenanigans, NFL controversy, German elections, terror attack in France, weakness in Home Sales, FOMC Meeting, etc. These events may be diverse but have implications for affecting interest rates, housing markets, and the Mortgage Business. Here is a quick review of key Economic Indicators and Data released in September 2017 that are important to Mortgage Professionals.


September Economic Indicators and Data in Review

Recapping Key Economic Data released in September that affects the Mortgage & Real Estate business:

  • Hurricane Irma hit Florida while Hurricane Maria completely devastated Puerto Rico.
  • 2nd quarter GDP Growth was revised up to 3.1% from 3.0% (2.2%YoY).  
  • The Economy added 156,000 new jobs during August.
  • Extensive changes to the Income Tax Code were proposed, but a lot of details were missing.
  • The Dollar strengthened after this month’s FOMC Meeting.


Interest Rates and Fed Watch September 2017

All eyes were on the FOMC announcement following last month’s FOMC Meeting. The statement showed the Fed has a firm commitment to raising interest rates a third time this year – most likely in  December. They also announced plans to start unwinding their balance sheet in October at a rate of $10 Billion per month. As the months progress, that may be increased to $20 Billion per month if market conditions are favorable and could go as high as $50 Billion. The Fed isn’t worried about low Inflation. They think the current low Inflation is temporary and will normalize around 2.0%. The Fed thinks the Economic disruption created by the recent Hurricanes is temporary and GDP will continue to strengthen. The next FOMC Meeting starts October 31. Odds are low that they will raise rates this month, but a rate hike in December can still be expected. Wage growth, Inflation, and GDP are all within the Fed’s 222 target range. Fed Watchers are placing a 70% probability of a 3rd rate hike this year.  


222 Fed Target

  • Inflation                       1.9% CPI for the last 12 months
  • Wage Growth              2.5% for the last 12 months
  • GDP Growth                2.2% annualized rate for the last 12 months (2nd Quarter = 3.1%)


Housing Market Data September 2017

The Economic Indicators for Housing show that inventory issues continue to take a toll on Home Sales. If you dig deep into the data, you will see that median and average prices of homes has started to decline slightly. Although prices are still about 6.0% higher than 12 months ago, the last round of housing data shows prices are softening. Those numbers take in the whole country. Some housing markets continue to see increasing prices while other regions show substantial declines. Hurricanes Harvey and Irma will dent Housing Starts in the short run but expect the data for Housing Starts to increase as reconstruction gets underway in the next few months.  


Economic Indicators for the Housing Market September 2017

  • Existing Home Sales (closed deals in August) fell 1.7% to an annual rate of 5,350,000 homes. The median price for all types of homes is now $253,500 – up 5.6% from a year ago. The median Single Family Home price is $255,500 and $237,600 for a condo. First Time Buyers were 31%, Investors 15%, Cash Buyers 20%. Homes were on the market an average of only 30 days. There are now 1,880,000 homes for sale (6.5% lower than a year ago).
  • New Home Sales (signed contracts in August) fell 3.4% to a seasonally adjusted annual rate of 571,000 units. The median price of a new home fell to $300,000, and the average sales price fell to $368,100. Inventory of New Homes for sale is up to 284,000 from 276,000.
  • Pending Home Sales Index (signed contracts in August) fell 2.6% to 106.3 from 109.1. The index is now down 2.6% in the last 12 months.
  • Housing Starts (excavation began in August) fell 0.8% to a seasonally adjusted annual rate of 1,155,000 units. Single-Family Housing Starts fell 0.5% to an annual pace of 856,000 units. Multifamily Starts fell 17.1%.
  • Building Permits (issued in August) rose 5.7% to an annual rate of 1,300,000. Single-Family permits fell 1.5% to 800,000 units, and Multifamily permits rose 19.6% to 500,000 units. 
  • New Home Sales, Housing Starts, and Building Permits are notoriously volatile indicators. They carry a lot of statistical uncertainty from constant revisions, changes to the seasonal adjustment formula, and are heavily influenced by weather.
  • S&P/Case-Shiller Home Price Index rose 0.7% in July. Year over year the 20 City Composite index is now up 5.8% in July from 5.65% in June.


Labor Market Economic Indicators September 2017

The Jobs Report released on September 1st showed the Economy added 156,000 new jobs in August. The August employment data was slightly disappointing. Most Economists were hoping to see 180,000 new jobs created during August. For the Economy to grow, there really needs to be about  200,000 new jobs created every month. Pro-growth Economists think 200,000 should be the target number, but the Fed is happy with “moderate” growth in jobs and wages. Manufacturing, Hospitality, Education, and Healthcare added the most workers while government hiring decreased.  

  • The Economy added 156,000 new jobs in August (180,000 expected).
  • The Unemployment Rate rose to 4.4% during August.  
  • The Labor Force Participation Rate was unchanged during August at 62.9%.  
  • The Average Wage rose 0.3% during August pegging wage growth at 2.5% year over year.  


Inflation Economic Indicators September 2017

Inflation edged higher last month for the first time this year. This year’s soft Inflation has been driven by low energy costs and commodity prices. Due to the destruction caused by the Hurricanes, Inflation should increase as rebuilding increases demand for commodities and laborers. Inflation has been below the Fed’s target of 2.0% all year. Thanks to Harvey, Irma, and Marie – that target will probably be exceeded – and provide fuel for a third interest rate hike in December. What was up? Hotels, energy, food, medical care, housing, truck rentals. What was down? Wireless phone service, used cars (expect used cars to increase as people replace the 500,000 cars ruined in the hurricanes).

  • CPI rose 0.4%, now up 1.9% in the last 12 months.
  • Core CPI (ex-food & energy) rose 0.2%, now up 1.7% in the last 12 months.
  • PPI rose 0.2%, now up 2.4% in the last 12 months.
  • Core PPI (ex-food & energy) rose 0.1%, up 2.0% in the last 12 months.


GDP Economic Indicators September 2017

The 3rd revision (guesstimate) for 2nd Quarter 2017 GDP revised growth to a 3.1% annualized rate (3.0% expected). That pegs Economic growth for the last 12 months at 2.2%. Early estimates are that this year’s Hurricane season will reduce GDP by 0.1% during the third quarter – but the rebuilding effort will add much more than that to GDP over the next 2 years. How big of a boost will the rebuilding efforts be for 2018 GDP? Early guesstimates are 0.1 to 0.2%. Remember – each quarter has 3 revisions for GDP. It’s a moving target, so all the revisions are more like guesstimates.


Consumer Economic Indicators September 2017

We thought that Consumers were back on a buying spree after July’s jump in Retail Sales, but the good news didn’t last too long. August Retail Sales data fell – and the July and June numbers were revised down. Just about all categories of goods and services were down – except gas which is a consequence of Hurricane Harvey. You can blame higher gas prices on Harvey, but weak Retail Sales has been going on since the beginning of the year. Building materials and auto sales were down but expect these categories to rebound as rebuilding in Houston and Florida get underway.  

  • Retail Sales fell 0.2% in August. For the year Retail Sales are up 3.2% year over year.
  • The Consumer Sentiment Index fell to 95.1 from 96.8 in August. 
  • Consumer Confidence fell to 119.8 from 122.9.       


International & Misc 

  • Angela Merkel has won a fourth term as German Chancellor.
  • New privileges for women in Saudi Arabia. King Salman issued a royal decree that would allow women to drive starting June 24, 2018. One condition is they need to have a male member of their household to sign off on their application. Women were also given permission to enter sports stadiums.
  • The US has deployed an Aircraft Carrier Strike Group to conduct military exercises with South Korea in response to the latest North Korean nuclear test.
  • ISIS claimed responsibility for another terrorist attack in Marseille France, as a knife-wielding man yelled “Allahu Akbar” before fatally stabbing two women on the subway. The suspect was shot to death by police.


This Economic Commentary is written to be a succinct summary of the major Economic Indicators and Economic Data that influence the Mortgage and Real Estate Industries. It is written for Mortgage Professionals that need to stay current on Economic Information but don’t have hours to research and analyze Economic Data. Feel free to share this with a friend or colleague in the Mortgage or Real Estate business. If you would like this Economic Calendar and Commentary emailed to you at the beginning of each month, click here.


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 Mark Paoletti,

300 Wholesale and Correspondent Mortgage Lenders on One Website


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