Economist's Commentary: August 27, 2008
Quick Take on the Economy: August 27, 2008
By George Ratiu
Durable Goods (Advance)
- New orders for durable goods increased 1.3 percent in July and shipments of durable goods rose even more strongly, by 2.5 percent. Shipment had increased a respectable 0.9 percent in the prior month also.
- Inventories of durable goods rose 0.8 percent in July, but the inventory-to-sales ratio remains fairly low.
Rising inventory, orders and shipments raise the third quarter GDP outlook.
Mortgage Bankers Association Weekly Mortgage Applications
- Mortgage applications for home purchases, as measured by the Market Composite Index, increased 0.5 percent in the past week, from 419.3 to 421.6. Compared to the same week a year ago, the Index was 31.2 percent lower.
- The Refinance Index, tracking applications for refinance, increased 0.3 percent from the previous week.
- The Government Purchase Index (mostly FHA) moved up 3.3 percent.
What does today's data mean for REALTORS® and consumers?
- The manufacturing sector is seeing some positive signs, driven by a strong growth in exports. The economy is surprisingly resilient in terms of durable goods activity.
- Mortgage rates moved down during this past week, with consumers seeking mortgage refinances.
Daily Forecast Update
- NAR's monthly official forecast as of August 7th (15K PDF)
- GDP Q3: 2.0%
- GDP Q4: 0.6%
- Unemployment rate by election time: 5.9%
- Average 30-year fixed mortgage rate in December: 6.6%
- Average 30-year fixed mortgage rate by mid-2009: 6.8%
- The next Fed policy change: a rate hike in December 2008
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >
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