Weekly Economic Review: Existing Home Sales Drop, New Home Sales Jump

Posted by Laine Smith on 3/24/17 8:00 AM

Topics: Economy

In this week’s economic review, mortgage rates softened, existing home inventory improved and new home sales climbed, mostly due to softened pricing.

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Home Sales

Existing home sales were soft and below expectations in February with a 3.7 percent drop to an annualized rate of 5.480 million. Year-over-year sales are up a strong 5.4 percent and pricing is up 7.7 percent. The median sales price for February was $228,400.

Existing home supply has been very thin this year but improved significantly in February, jumping from a 3.5-month supply in January to a 3.8-month supply. Despite improving inventory, days on the market are very limited. The average for February was 45 days versus 59 days in February 2016.

New home sales jumped 6.1 percent in February to an annualized rate of 592,000, which is past consensus levels and near the highest estimate of 600,000. The spike in sales likely occurred due to builder concessions as the median price fell 3.9 percent in the month to $296,200. Year-over-year median pricing is in the negative column at -4.9 percent.

New home supply increased slightly in the month, up 4,000, but supply relative to sales dropped from 5.6 months in January to a 5.4-month supply.

Home Prices

The Federal Housing Finance Agency’s House Price Index came in unchanged for the month of January with a year-over-year appreciation dropping 0.5 percent to 5.7 percent, making it the lowest month-to-month showing in over four years and the weakest year-over-year percentage in 2.5 years.

This week in the economy:

  • The 30-year fixed-rate fell back as of March 23rd with the average standing at 4.23 percent with 0.5 points, according to Freddie Mac.
  • Purchase applications fell a seasonally adjusted 2 percent the week of March 17. Refinance applications also decreased by 3 percent, according to MBA Mortgage Applications.
  • Initial jobless claims jumped 15,000 to a 7-week high of 258,00 the week of March 18th, according to Bloomberg. The 4-week average, though, increased by only 1,000 to 240,000.
  • The Bloomberg Consumer Comfort Index continued its climb the week of March 19th, gaining 0.3 points to a level of 51.3.

The economic calendar for the week of March 27, 2017:

  • Tuesday – S&P Corelogic Case-Shiller HPI, Consumer Confidence
  • Wednesday – MBA Mortgage Applications, Pending Home Sales Index
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, GDP
  • Friday – Consumer Sentiment

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