In this week’s economic review, existing home sales rose along with home prices while inventory continued to fall, consumer confidence recovered some ground, and mortgage rates jumped.
Existing Home Sales
March existing home sales rose more than expected with a 1.1 percent increase in the month. Homes sold at a seasonally adjusted annual pace of 5.60 million, up from February’s 5.54 million. In comparison, though, March’s sales were down 1.2 percent year-over-year.
While the increase in sales hints that buyers haven’t been deterred by low inventory, time on the market has dropped 4 days over the last year with. On average in March, homes were on the market for 30 days. Unsold inventory currently stands at a 3.6-month supply, the lowest level on record for March.
The March median home price, $250,400, is up 5.8 percent from a year ago, marking the 73rd straight month of year-over-year gains.
New Home Sales
Sales of new homes surged in March with a monthly 4 percent increase, which is mostly attributed to a leap in sales in the West region. Due to the two prior months’ upward revisions, sales are 10.3 percent higher than a year ago.
Median new home prices are up 4.8 percent year-over-year, standing at $337,200.
According to the Federal Housing Financing Agency (FHFA), which monitors home sales prices from Fannie Mae and Freddie Mac mortgage data, U.S. home prices rose 0.6 percent in February with an upward revision to January’s report (from 0.8 percent to 0.9 percent).
April consumer confidence rebounded to a higher-than-expected level of 128.7 (close to an 18-year record-high) after breaking a two-month streak of gains in March. A larger share of respondents said they expected to purchase big-ticket items like cars and appliances within the next six months, but a record-high number of respondents (7.8 percent) said they plan to purchase a home.
The first reading of first-quarter GDP was up 2.3 percent versus an expected 2.0 percent growth. Despite surpassing expectations, the U.S. economy grew at its weakest pace in nearly five years throughout the first quarter of 2018 due to weak consumer spending.
This week in the economy:
- As of April 26th, the 30-year average fixed rate was 4.58% with 0.5 points, according to Freddie Mac.
- In the week of April 20, the purchase sector of mortgage applications saw no change as mortgage rates increased. Refinance applications declined 0.3 percent from the week prior, and the refinance share of mortgage activity fell to 37.2 percent, the lowest since September 2008.
- In the week of April 21st, initial jobless claims dropped to their lowest level in more than 48 years. Initial claims fell 24,000 from the week prior to a seasonally adjusted level of 209,000.
- The Bloomberg Consumer Comfort Index dropped 0.6 points to a level of 57.5 in the week of April 22nd.
The economic calendar for the week of April 30th, 2018:
- Monday – Pending Home Sales Index
- Wednesday – MBA Mortgage Applications, ADP Employment Report
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Employment Situation
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