Weekly Economic Review: Home Sales Up, Price Gains & Home Supply Slows

Posted by Laine Smith on 10/23/15 2:12 PM

Topics: Economy

Housing market data released this week showed solid gains. Existing home sales bounced back from an August decline with an increase of 4.7 percent for September, near the best levels since 2007. Year-over-year, existing home sales are up 8.8 percent, matching spring sales gains.

Economic Update Home Prices, Price Appreciation and Housing Supply

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Prices of existing home sales in September fell, though, by 2.9 percent to a median purchase price of $221,900. Year-over-year the median existing home price is up 6.1 percent. The FHFA House Price Index also noted a slowdown in home price appreciation in August with a mere 0.3 percent gain. Year-over-year price appreciation, which had been edging upwards toward 6 percent moved down to 5.5 percent.

Economists are predicting sales prices to firm in the coming months as supply grows thin. Six months of supply is considered a stable housing supply, but September existing home supply fell to a 4.8-month supply point, 3 percent lower than a year ago.

Last week in the economy:

  • Mortgage rates (the national average) increased by 0.02% (2 basis points).
  • Volatility continues in mortgage applications following the enactment of new disclosure rules under TRID. After falling 34% last week, the MBA Mortgage Applications purchase sector increased 16% in the October 16 week. The refinancing index jumped 9% after falling 23%.
  • Initial Jobless Claims were up minimally from the prior week's 42-year low. Claims grew 3,000 but were still lower than expected.
  • Housing Starts came in above high-end expectations in September with a 6.5% increase. Permits, though, were down 5% which was well below Econoday's low estimate.
  • Bloomberg's Consumer Comfort Index fell back in the October 18 week, down 1.7 points.

What's on the economic calendar for the week of October 26, 2015:

  • Monday: New Home Sales
  • Tuesday: Consumer Confidence
  • Wednesday: MBA Mortgage Applications and FOMC Meeting Announcement
  • Thursday: Jobless Claims, GDP, and Pending Home Sales Index
  • Friday: Consumer Sentiment and Employment Cost Index

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