Weekly Economic Review: Areas of Housing Market Continue to Show Strength

Posted by Laine Smith on 6/24/16 10:00 AM

Topics: Economy

Existing Home Sales were not extraordinary in May but continue to show strength. Sales increased 1.8 percent for the month, which is the “best rate of the cycle, since back in February 2007”, according to Bloomberg.

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Median prices increased 3.8 percent to $239,700, but the median sales price is still only 4.7 percent higher than a year ago. Inventory did increase by 1.4 percent but lack of available homes is still a factor in holding back sales.

While housing data has been mostly strong, the FHFA House Price Index barely budged in April. The mere 0.2 percent increase was much lower than expectations and the lowest reading since June 2015.

For the negative housing market data, new home sales fell 6 percent in May, though the annualized rate is appreciable at 551,000. Median prices fell 9.3 percent to $290,400 with the year-over-year median price only up 1.0 percent. Supply, on the other hand, was a positive for the report. Three thousand new homes entered the housing market in the month of May.

Last week in the economy:

  • The purchase sector of MBA Mortgage Applications was down 2 percent in the June 17 week despite falling mortgage rates. Year-over-year growth slowed 4 percentage points to 12 percent. The refinance sector bounced up 7 percent.
  • Initial Jobless Claims are at historic lows, falling a drastic 18,000 to 259,000 in the June 18 week.
  • Bloomberg’s Consumer Comfort jumped a strong 2.1 points in the June 19 week, pulling the index above 44 for the first time since early 2016.

What’s on economic calendar for the week of June 20, 2016:

  • Tuesday – GDP, Consumer Confidence
  • Wednesday – MBA Mortgage Applications, Pending Home Sales Index
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index

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