7/19: MetroIntelligence Economic Update by P. DUFFY

June Leading Economic Index slips 0.3 percent to 111.5, first decline in seven months

The US LEI fell in June, the first decline since last December, primarily driven by weaknesses in new orders for manufacturing, housing permits, and unemployment insurance claims.  For the first time since late 2007, the yield spread made a small negative contribution. As the US economy enters its eleventh year of expansion,  the LEI suggests growth is likely to remain slow in the second half of the year.



Fed Beige Book:  Modest economic expansion to continue despite trade-related concerns

Economic activity continued to expand at a modest pace overall from mid-May through early July, with little change from the prior reporting period. In most Districts, sales of retail goods increased slightly overall, although vehicle sales were flat. On balance, home sales picked up somewhat, but residential construction activity was flat. Nonresidential construction activity increased or remained strong in most reporting Districts, and commercial rents rose. The outlook generally was positive for the coming months, with expectations of continued modest growth, despite widespread concerns about the possible negative impact of trade-related uncertainty.



June new home mortgage applications fell 14.0 percent from May, but up 17.9 percent year-on-year

Mortgage applications for new home purchases in June fell 14 percent from May, but increased 17.9 percent year-on-year.  By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.0 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 12.7 percent. The average loan size of new homes decreased from $330,311 in May to $329,593 in June.



Mortgage applications dip slightly as rates rise, but purchase loans still up 7.0 percent year-on-year

The Market Composite Index decreased 1.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 4.0 percent (but up 7.0 percent year-on-year) and refinance activity rising 2.0 percent (and up 87 percent year-on-year).   The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.12 percent from 4.04 percent.