MetroIntelligence Economic Update by P. DUFFY
Purchase loan apps fall 10 percent from previous week and 12 percent year-on-year
The Market Composite Index for mortgage applications decreased 8.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 10 percent (and down 12 percent year-on-year) and refinance activity falling 7 percent (and down 52 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages increased to 3.83 percent from 3.78 percent.
January Small Business Optimism Index slips 1.8 points as inflation challenges persist
The NFIB Small Business Optimism Index decreased slightly in January to 97.1, down 1.8 points from December.
Inflation remains a problem for small businesses as 22% of owners reported that inflation was their single most important business problem, unchanged from December when it reached the highest level since 1981. The net percent of owners raising average selling prices increased four points to a net 61% (seasonally adjusted), the highest reading since the fourth quarter of 1974.
Home Purchase Sentiment Index falls 2.4 points in January and 5.9 points year-on-year
The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 2.4 points to 71.8 in January, its lowest level since May 2020 and down 5.9 points year-on-year as affordability constraints continue to weigh on the housing market. A survey record-low 25% of respondents reported that it’s a good time to buy a home, compared to the 69% of consumers who reported that it’s a good time to sell. Consumers also reported greater concerns about job stability and the future path of mortgage rates.