Housing market data came in soft for August, posting low inventory in both the new and existing homes and projecting low sales for the fall. Meanwhile, mortgage rates fell to near yearly lows.
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Consumer confidence was on the up-and-up in September, posting a 3-point gain to the highest level since August 2007. During the recession, this index level dipped as low as 25. September’s level stood at 104.1.
New home sales dropped 7.6 percent in August but still stayed within consensus levels. July’s New Home Sales report also had an upward revision of 5,000 (a monthly gain of 13.8 percent from June). Median pricing was down 3.1 percent for the month and down 5.4 percent year-over-year. While total new homes for sale increased in August, supply is stubbornly low at 4.6 months but up 8.3 percent year-over-year.
The pending home sales index for August is foreshadowing further declines in existing home sales this fall. Contracted sales fell 2.4 percent in the month with 3 out of 4 regions noting declines. This is the third straight month of declines. The National Association of Realtors chief economist, Lawrence Yun said “affordability is a major factor” for buyers, especially in the South and West where price appreciation has increased at the fastest pace.
This week in the economy:
- The 30-year fixed-rate (average) fell to 3.42 percent (with an average 0.5 point) on Thursday, according to Freddie Mac.
- The purchase application index of MBA Mortgage Applications increased a seasonally adjusted 1 percent. Year-over-year the index is up 10 percent. The refinance sector dropped 2 percent from the previous week.
- Initial Jobless Claims remained low in the September 24 week. Initial claims increased by 3,000 to 254,000 but the 4-week average fell by 2,500 to 256,000.
- The Bloomberg Consumer Comfort Index edged 0.3 points higher in the week of September 25 but remains soft at 41.6.
What’s on economic calendar for the week of October 3, 2016:
- Monday – Gallup US Consumer Spending Measure
- Wednesday – MBA Mortgage Applications, ADP Employment Report, Gallup US Job Creation Index
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Employment Situation, Consumer Credit
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