Weekly Economic Review: January Existing Home Sales Tumble

Posted by Laine Smith on 2/25/18 9:00 AM

Topics: Economy

In this week’s economic review, the 30-year average mortgage rate was up, home resales fell despite a small bump in inventory, and existing home median prices dropped.

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Existing Home Sales

Despite increasing inventory and slowing price gains, January existing home sales fell 3.2 percent to the lowest January sales rate since January 1999. Year-over-year resales are down 4.8, the largest decline since August 2014.

Inventory increased 4.1 percent from December to a 3.4-month supply but still remains nearly 10 percent lower than January 2017.

The median home price fell sharply, down 2.4 percent to $240,500. Year-over-year, resale prices are up 5.8 percent.

Federal Reserve Minutes

Though the Federal Reserve decided against a January rate hike, the meeting minutes released on Wednesday indicated that the upwardly revised outlook of economic growth would lead to more rate hikes in the near future.

This week in the economy:

  • As of February 22nd, the 30-year average fixed rate climbed 2 basis points to 4.40 percent with 0.5 points, according to Freddie Mac.
  • In the week of February 16th, the purchase sector of mortgage applications fell by a seasonally adjusted 6 percent amidst rising rates. Purchase applications are now up just 3.0 percent year-over-year. Refinancing applications dropped 7 percent from the previous week and further declined the refinance share of mortgage activity to 44.4 percent, the lowest level since July 2017.
  • In the week of February 17th, initial jobless claims fell by 8,000 to a level of 220,000, a very favorable reading. The 4-week average stood at 246,000, down 13,500 from a month ago and just shy of the 45-year low that was seen two weeks prior.
  • The Bloomberg Consumer Comfort Index held at a respectable level of 56.6 in the week of February 18th. The prior week’s reading of 57.0 was an expansion high.

The economic calendar for the week of February 26th, 2018:

  • Monday – New Home Sales
  • Tuesday – S&P Corelogic Case Shiller HPI, FHFA House Price Index, Consumer Confidence
  • Wednesday – MBA Mortgage Applications, Pending Home Sales, GDP
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
  • Friday – Consumer Sentiment

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