Economic Updates

The National Association of Home Builders/Wells Fargo housing market index fell five points in June to 17. Economists had anticipated a reading of 21. The five-point drop was the largest since November 2008. An index reading below 50 indicates negative sentiment about the housing market.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending June 11 increased 17.7%. Refinancing applications jumped 21.1% to the highest level in a year. Purchase volume rose 7.3%, the first increase in six weeks.

The combined construction of new single-family homes and apartments in May fell 10% to a seasonally adjusted annual rate of 593,000 units. Applications for new building permits, seen as an indicator of future activity, fell 5.9% to an annual rate of 574,000 units.

The producer price index, which tracks wholesale price inflation, fell 0.3% in May, following a 0.1% decrease in April. Core prices — excluding food and fuel — rose 0.2% for a second month. For the year, wholesale prices are up 5.1%.

Industrial production at the nation's factories, mines and utilities increased 1.2% in May, following a 0.7% gain in April. The overall factory-operating rate rose to 74.7% of capacity in May, the highest reading since October 2008.

Consumer prices fell a seasonally adjusted 0.2% in May, following a 0.1% increase in April. It was the biggest decline since December 2008.

Initial claims for unemployment benefits rose by 12,000 to 472,000 for the week ending June 12. Continuing claims for the week ending June 5 rose by 88,000 to 4.57 million.

Upcoming on the economic calendar are reports on the housing price index on June 29, pending home sales on July 1 and factory orders on July 2.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pkwy., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132