The wholesale inflation reading Producer Price Index (PPI) for October was unchanged versus the +0.3% expected, as reported by the Bureau of Labor Statistics. The decrease was led by higher costs of natural gas and gasoline, which were offset by a decrease in food prices and lower costs for services like financial advice and hospital outpatient care. The Core PPI, which strips out volatile food and energy, was -0.2%, below the +0.2% expected. Tomorrow's Consumer Price Index, or inflation at the consumer level, will be closely watched by Fed members along with today's PPI when considering monetary policy at next month's Fed meeting.
Home builders reported that sentiment remained steady in November in the latest survey from the National Association of Home Builders (NAHB). However, the survey was completed before the presidential election, which caused mortgage rates to rise in the past week. The NAHB Housing Market Index held at 63 this month, just below the 64 expected. 50 is the dividing line between positive and negative sentiment. The NAHB said that builder sentiment has held above 60 for the past three months, indicating that the single-family sector continues to show slow, gradual growth.
The Mortgage Bankers Association (MBA) reports that mortgage rates posted their largest weekly increase since June 2013 after the presidential election results were tallied. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.95%, from 3.77%, with points increasing to 0.39 from 0.38 (including the origination fee) for 80% loan-to-value ratio loans. The MBA's Market Composite Index, a measure of total mortgage application volume, plunged 9.2% in the latest week as rates pushed, while the refinance index fell 11% and the purchase index declined by 6%.