In this week’s economic review, mortgage rates were down for a second week in a row, new and existing home sales dropped in April and home prices continue to edge upward.
New Home Sales
After surging in March, new home sales dropped 11.4 percent lower to a lower-than-expected annualized rate of 569,000. On a positive note, both March and February’s reports had upward revisions. Despite the drop in April and overall unusual volatility, the 3-month average in April was down just 5,000 from March’s average.
New home pricing fell 3 percent to a median of $309,200. Year-over-year, the median price is down nearly 4 percent. Inventory jumped to a 5.7-month supply due to the steep decline in sales.
Existing Home Sales
April existing home sales also saw a drop of 2.3 percent. The median sales price rose 3.5 percent to $244,800, bringing the year-over-year price increase to 6 percent.
While inventory remains thin, supply relative to sales improved to 4.2 months from 3.8 months in both March and February.
Falling right in line with the existing home sales price appreciation, the FHFA House Price Index is up 6.2 percent with a 0.6 percent gain in March.
The second reading of 2017’s first quarter GDP was much more upbeat. GDP increased at a 1.2 percent annual rate instead of the first report of a 0.7 percent pace. The increase was centered in the consumer spending component, which doubled to 0.6 percent.
In May, consumer optimism held steady with a reading of 97.1. The expectations component is up 7-tenths from April to 87.7, but the current conditions component took a 1-point dip down to 111.7.
This week in the economy:
- The 30-year fixed-rate decreased as of May 25, landing at 3.95% with 0.5 points, according to Freddie Mac.
- Purchase applications fell a seasonally adjusted 1 percent in the week of May 19, but refinance applications increased by 11 percent from the previous week, according to MBA Mortgage Applications.
- Initial jobless claims edged 1,000 higher in the week of May 20, according to Bloomberg, but the index continues to hold near record lows. The 4-week average is down 5,750 to 235,250.
- The Bloomberg Consumer Comfort Index increased 0.7 points in the week of May 21 to a level of 50.9.
The economic calendar for the week of May 29th, 2017:
- Tuesday – Consumer Confidence
- Wednesday – MBA Mortgage Applications, Pending Home Sales
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, ADP Employment Report
- Friday – Employment Situation
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