The housing sector showed continuing signs of improvement in data released last week. Existing home sales increased 5.1 percent in May to a 5.35 million annual rate, which hit high-end Econoday expectations. Year-over-year, existing sales have increased 9.2 percent.
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New home sales increased 2.2 percent in May to an annual rate of 546,000, which is 6,000 above the high-end Econoday forecast. With April's rate revision, May's new home sales made a 8.1 percent monthly gain. Year-over-year new home sales have increased nearly 20 percent.
As existing and new home sales improve, existing home prices are also rising, up 7.9 percent year-over-year at a median price of $228,700. New home prices are down 2.9 percent to a median of $282,800, but lack of supply may point to future price acceleration.
Positive news from the housing market coupled with a strong reading of consumer sentiment. Data shows consumer sentiment jumped to 96.1, which reflects optimism for the job market of 97.8. This is a 12-year high and a 13.6 point surge from May's reading, which is the largest monthly gain since March 1991.
Last week in the economy:
- Mortgage rates (the national average) increased 0.15% (15 basis points).
- The S&P 500 decreased 0.43%, ending the week at 2,101.
- The purchase index of MBA Mortgage Applications inched higher in the June 19 week, increasing by 1 percent. Refinance applications increased 2.0 percent. Year-over-year, purchase applications are up 18 percent.
- Initial Jobless Claims remain steadily low, though initial claims increased 3,000 to 271,000 for the week of June 20.
What's on the economic calendar for the week of June 29, 2015:
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