The biggest economic reports released last week were housing related. Low mortgage rates (thanks, Brexit), falling supply and increased homebuyer traffic continue to drive housing demand but seemingly only in the existing home market.
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According to the National Association of Home Builders Housing Market Index, growth in the new home market is firm. While the sales index for July stood at 63, the report indicated decreasing optimism for future sales, which took a three-point dip from June. According to Bloomberg, weakness is attributed to traffic, especially amongst first-time homebuyers.
Existing home sales, on the other hand, are continuing to show traction. June’s 5.570 million annualized sales rate for June is the best of the recession. The median sales price last month increased by 3.7 percent to $247,700, with a year-over-year rate of plus 4.7 percent. Limited inventory, which fell 0.9 percent to a 4.6-month supply, is continuing to drive sales prices higher.
Last week in the economy:
- Mortgage rates ended with an increase last week, which slowed purchase applications by 2 percent. Refinancing activity also dropped by 1 percent, but year-over-year the purchase sector of MBA Mortgage Applications is up 16 percent.
- Initial Jobless Claims fell by 1,000 in the July 16 week to a 253,000 level, amongst the lowest of the recovery.
- Consumer Comfort took a hit in the July 17 week with a 2-point drop to a level of 42.9.
- Housing starts for June rose 4.8 percent to a 1.189 million annualized rate. Permits were also up by 1.5 percent.
- The FHFA House Price Index was up only 0.2 percent in May, which is the weakest increase since August 2015.
What’s on economic calendar for the week of July 25, 2016:
- Tuesday – New Home Sales
- Wednesday – MBA Mortgage Applications, Pending Home Sales & FOMC Meeting Announcement
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Consumer Sentiment, GDP
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