Weekly Economic Review: Existing Home Sales & Prices Fall in Feburary

Posted by Laine Smith on 3/25/16 12:29 PM

Topics: Economy

Economic data contained few surprises and had minimal impact on mortgage rates going into the holiday weekend.

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Image courtesy of cooldesign at FreeDigitalPhotos.net

In housing market news, existing home sales disappointed in February, down 7.1 percent to a 5.080 million annualized rate. The annualized sales rate is the second lowest since February 2015. The median sales price fell 1.4 percent to $210,800, another aspect of the report down to its lowest since February 2015.

An encouraging component of the Existing Home Sales report was inventory, which increased by 3.3 percent but is still down 1.1 percent year-over-year. Overall supply relative to sales was boosted to 4.4 months from 4.0 months in January. Inventory, however, is still very low heading into the busiest homebuying season.

In the new home market, February sales surged out west after a disappointing 33 percent drop in January. The West sector’s 39 percent jump helped minimize January’s flop. Overall, February new home sales were up two percent, as expected. The median sales price jumped 6.2 percent to $301,400 for the month. Supply also inched 4,000 higher to a 7-year high. Supply relative to sales remains unchanged, though.

Last week in the economy:

  • Mortgage rates (the national average) increased 0.01% (1 basis point).
  • The purchase sector of MBA Mortgage Applications fell back by 1 percent in the week of March 18, but year-over-year purchase applications are up 25 percent. Refinance applications continued to decrease, down 5 percent.
  • Initial Jobless Claims fell to 265,000 in the week of March 19. According to Bloomberg, the latest reading for initial claims is the 55th consecutive reading under the 300,000 mark, making it the longest streak since 1973.
  • January’s FHFA House Price Index gained some traction, up 0.5 percent for the month to a year-over-year rate of plus 6 percent (one of the best annualized rates in a couple years, according to Bloomberg).
  • Real GDP was stronger than expected for the last quarter of 2015 with an annualize rate of plus 1.4 percent for the third estimate. Expectations are for 1.0 percent.

What's on the economic calendar for the week of March 28, 2016:

Monday: Pending Home Sales Index

Tuesday: Consumer Confidence

Wednesday: MBA Mortgage Applications, ADP Employment Report

Thursday: Jobless Claims & Bloomberg Consumer Comfort Index, JOLTS

Friday: Employment Situation, Consumer Sentiment & Construction Spending

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