In this week’s economic review, existing home sales fell as prices increased, current conditions of the new home market were positive as the outlook declined, and mortgage rates fell.
Housing Market Index
The home builders’ housing market index edged back 2 points in June to 68, which was at the low end of expectations. All three components – current sales, future sales, and traffic – fell back one point. Traffic is at the lowest point since November 2017.
The strength in May’s housing starts report was completions with a 1.9 percent increase. Starts increased 5.0 percent, at the high end of consensus ranges, but permits were down for a second straight month. In May, permits fell 4.6 percent with a 2.2 percent drop in single-family home permits.
The good news is that the outlook of future supply remains positive and the current outlook for single-family homes is strong with a 3.9 percent rise in single-family home starts.
Existing Home Sales
Existing home sales fell 0.4 percent in May to a lower-than-expected 5.430 million rate. Year-over-year the index is down 3.0 percent.
Supply and affordability remain the main factors in weakening sales as the median sale price rose 2.7 percent in the month to a record $264,800. Year-over-year, the median price is up 4.9 percent.
Supply was added in May, up 2.8 percent, which allowed the inventory level to rise to 4.1 months versus 4.0 months in April.
This week in the economy:
- As of June 21st, the 30-year average fixed rate was 4.57% with 0.5 points, according to Freddie Mac.
- In the week of June 15th, the purchase index rose a sold 4.0 percent and the refinance index jumped 6.0 percent. Despite the increase, the purchase index year-over-year remains in the negative at minus 1.0 percent.
- In the week of June 16th, initial jobless claims saw no change, at 218,000. The 4-week average moved down 4,000 to 221,000.
- The Bloomberg Consumer Comfort Index jumped 7 tenths higher in the week of June 17 to the best showing since early May.
The economic calendar for the week of June 25th, 2018:
- Monday – New Home Sales
- Tuesday– S&P Corelogic Case-Shiller HPI
- Wednesday – MBA Mortgage Applications, Pending Home Sales Index
- Thursday–Jobless Claims, Bloomberg Consumer Comfort Index, GDP
- Friday– Consumer Sentiment
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