U.S. mortgage applications rose 1.1% for the week ended July 6, the Mortgage Bankers Association reported July 11. Applications were 10.5% above their year-ago level.

Meanwhile, the National Association of Realtors (NAR) said on July 11 that it expects existing-home sales to rise to nearly 6.4 million units in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, NAR said.

As for new homes, NAR projected sales of 865,000 in 2007, and 878,000 next year, but the 2008 projection would still be down more than 20% compared with the nearly 1.1 million new homes sold in 2006.

Consumer borrowing rose at an annual rate of 6.4% in May, far above the small 1.1% gain in April and double what analysts had forecast, the Federal Reserve reported July 9. According to David Wyss, chief economist at Standard & Poor’s, some of the credit card surge reflects the fact that tightening bank standards are making home equity loans harder to obtain and home values are not soaring as they did during the housing boom.

Addressing a National Bureau of Economic Research conference on July 10, Federal Reserve Chairman Ben Bernanke noted that Americans’ expectations about inflation play an important role for Federal Reserve policy makers in their efforts to tame inflation. His talk dimmed hopes for a reduction in the Fed’s key interest rate, which has held steady at 5.25% for just over a year.

This week look for updates on the Producer Price Index on July 17 and the Consumer Price Index on July 18.

Sales of new single-family homes fell 1.6% in May, far better than the 6.2% decline Wall Street had anticipated, the Commerce Department said June 26. The median price of a new home fell 0.9% to $236,100 in May, down from $238,200 in May 2006.

Existing home sales fell 0.3% in May to 5.99 million units, the slowest sales pace in four years, the National Association of Realtors said June 25. The median price of an existing home was $223,700, down 2.1% from a year earlier, marking the 10th straight month that the price has shown a year-over-year decline.

Construction spending in May climbed 0.9%, the largest jump in nearly 18 months, and well above Wall Street’s expectation of a 0.1% rise, the Commerce Department reported June 29. Spending on residential construction, however, fell 0.8% to an annually adjusted rate of $549 billion, the 15th consecutive monthly decrease.

Orders to U.S. factories for big-ticket manufactured goods — expected to last three or more years — dropped by 2.8% in May, the largest amount in four months, and a far bigger slide than the 1% decline economists had forecast, the Commerce Department said June 27. A 22.7% plunge in commercial aircraft orders paced the decline.

Meanwhile, consumer spending in May rose by 0.5% for the second month in a row, the Commerce Department said on June 29. Incomes, which fuel spending, rebounded in May by 0.4%, after falling 0.2% in April.

The first-quarter growth rate of the nation’s gross domestic product was downgraded from a preliminary estimate of 1.3% to just 0.6%, the worst showing in more than four years, the Commerce Department said May 31. The foreign trade deficit was largely blamed for stunting growth.

Employers, however, did their part for the economy, adding 157,000 jobs to their payrolls in May, the Labor Department reported June 1. Economists had forecast growth of 135,000 jobs.

Personal income slipped 0.1% in April from March, the first drop in two years, the Commerce Department said June 1. The decline follows the pay-out of unusually large Wall Street bonuses and corporate stock options in the first quarter of 2007. Analysts expected personal income to rise 0.3%.

Although personal income dipped, consumer spending — a key ingredient to a healthy economy — rose a strong 0.5% in April, ahead of analysts’ forecast of 0.4%, the Commerce Department reported June 1.

Manufacturing output also rose, as the Institute for Supply Management said its manufacturing index in May climbed to 55, above April’s 54.7 reading and higher than the market expectation of 54. A reading above 50 indicates growth.

Consumer confidence increased as well, with The Conference Board, a private research group, reporting that its index of consumer confidence for May moved to 108 from 106.3 in April. Economists had expected a reading of 105.

For the week, mortgage rates on fixed-rate products rose again, Freddie Mac said May 31.