by Warren Mosler
MBA Purchase Applications
Mortgage purchase applications rose 3.0 percent in the March 21 week but failed to lift the year-on-year rate which is down a very sharp 17.0 percent. The year-on-year rate is a reminder of how important cash buyers are right now in the housing market and also a reminder that mortgage rates this year are less favorable than this time last year. The refinance index fell 8.0 percent in the week. Rates rose in the week with the average 30-year mortgage for conforming loans ($417,500 or less) up 6 basis points to 4.56 percent.
Durable Goods Orders
The latest durables orders report was mixed with the headline strong and the core slowing. New factory orders for durables in February rebounded 2.2 percent, following a decrease of 1.3 percent in January. Analysts projected a 1.0 percent rise. Excluding transportation, durables orders slowed to a 0.2 percent rise in February, following a 0.9 percent boost the prior month.
The transportation component jumped a monthly 6.9 percent after dropping 6.2 percent the month before. Within transportation, the gain was led by increases in orders for defense aircraft although nondefense aircraft and motor vehicles also were strong.
Outside of transportation, orders were up slightly but very mixed by subcomponents. Gains were seen in primary metals, fabricated metals, computers & electronics, and “other.” Notably offsetting were declines in machinery and electrical equipment.
There was slippage in investment plans. Nondefense capital goods orders excluding aircraft decreased 1.3 percent in February, following a rebound of 0.8 percent the month before. Shipments for this series advanced 0.5 percent, following a 1.4 percent drop in January.
The latest durables report suggests that manufacturing is not as strong as indicated by recent manufacturing surveys.
Note the year over year line:
From yesterday, the charts looks like sales were rising nicely before being flattened by the tax hikes and spending cuts:
Still too early to tell, but so far charts aren’t showing much of a ‘bounce’ from the weather yet.