Home borrowing costs were essentially unchanged in the latest week and remain at historically low levels. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage rose to 3.18% from 3.17% with 0.34 in points for the week ended April 30, 2021. The Market Composite Index, a measure of total mortgage loan application volume, fell 0.9%, while the Purchase Index declined by 2%. The Refinance Index was unchanged and is down 17% from a year ago. Spokesperson Joel Kan said, "Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity."
Activity in the service sector of the U.S. economy slipped in April from March but remains at expansionary levels. The ISM Service Index fell to 62.7 in April from 63.7 in March. A reading above 50 indicates the services sector economy is generally expanding; below 50 indicates the services sector is generally contracting. Economic activity had expanded for 11 straight months and expanded for all but two of the last 135 months. The April reading is one point lower from the all-time high hit in March (63.7). Within the report, it showed that the employment component increased.
The U.S. labor market continues to rebound as the financial markets received a strong report from the private sector. ADP private payrolls rose by 742,000 in April, near estimates while March was revised higher to 565,000 from 517,000. Small business growth was 235,000, medium grew by 230,000 while large businesses were up 277,000. The labor market continues an upward trend of acceleration and growth, posting the strongest reading since September2020,” said Nela Richardson, chief economist, ADP.