Weekly Economic Review: June Housing Market Index Jumps

Posted by Laine Smith on 6/21/15 10:12 AM

Topics: Economy

The Fed statement and the release of U.S. economic data caused some volatility last week but had little net affect. Mortgage rates ended the week a little lower.


Image courtesy of cooldesign at FreeDigitalPhotos.net

The Fed's post-meeting statement contained no major surprises; the timing of the first federal funds rate hike remained unchanged and is dependent on future economic improvement. The majority of economists concur continued improvement will justify a September rate hike.

Housing starts and permits showed a decrease of 11.1 percent from the revised April rate, which spiked a 22.1 percent difference from March.

The Housing Market Index increased 5 points from May, well above high-end forecasts. This reading matches September 2014 as the strongest reading of the recovery. The index is weighted on several indexes: present sales of new homes, sales of new homes expected in the next six months, and traffic of prospective buyers in new homes.

Future sales led the Housing Market Index reading, jumping 6 points, followed by present sales. Traffic continues to lag, but is up 5 points for the month, a good indication for summer homebuying. The South is the strongest growth region for new homes, followed by the West and Midwest. The Northeast, the smallest new home region, still remains in contraction.

Last week in the economy:

  • Mortgage rates (the national average) fell 0.07% (7 basis points).
  • The S&P 500 was up 0.76% to 2,110.
  • The purchase index of MBA Mortgage Applications fell sharply in the June 12 week, down 4 percent. The refinancing index was down 7 percent following an increase in mortgage rates.
  • Initial Jobless Claims are back down to near-historic lows after trending slightly higher in recent weeks. Initial claims fell 12,00 in the June 13 week.
  • The Housing Market Index jumped to 59 from 54 in May. The increase was well outside Econoday's high-end forecast.
  • The Consumer Price Index points to soft price pressure in May with an overall monthly gain of 0.4 percent.

What's on the economic calendar for the week of June 22, 2015:

Monday: Existing Home Sales will be updated.

Tuesday: New Home Sales will be released.

Wednesday: MBA Mortgage Applications and GDP reports will be released.

Thursday: Jobless Claims will be updated.

Friday: Consumer Sentiment will be released.

If you enjoyed our economic review, you can get economic updates e-mailed to you weekly by clicking the button below:

Subscribe to Weekly Economic Updates

Subscribe to Email Updates