Weekly Economic Review: New Home Sales Pace at Highest in Eight Years

Posted by Laine Smith on 7/29/16 12:55 PM

Topics: Economy

Despite the lessening optimism for future sales in the National Association of Home Builders Housing Market Index released last week, new home sales surged in June to the highest pace in eight years. The New Home Sales report showed an annualized rate of 592,000, which is 25 percent higher than June 2015. 

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Regionally, the Midwest leads sales, which are up 44 percent year-over-year. The median new home sales price is up 6.1 percent from a year ago to $306,700.

The Fed decided to keep the target interest rate unchanged at 0.25-0.50 percent, though the vote was not unanimous like it was at the June meeting. The post-meeting statement noted that the FOMC felt the economy was expanding at an appreciative rate and the labor market strengthened after their last meeting.

Last week in the economy:

  • Purchase applications were down 3 percent according to MBA Mortgage Applications. Refinance applications also dropped a heavy 15 percent in the July 22 week.
  • Following three weeks of historically low readings, new jobless claimed increased by 14,000 in the July 23 week to 266,000. The 4-week average, though, dropped 1,000 to 256,500, which is more than 10,000 less than a month ago.
  • The Pending Home Sales Index is showing less strength for June, with only a 0.2 percent increase. Year-over-year the index is up only 1 percent.
  • Bloomberg’s Consumer Comfort Index remained unchanged in the July 24 week, standing at 42.9.

What’s on economic calendar for the week of August 1, 2016:

  • Wednesday – MBA Mortgage Applications, ADP Employment Report, Gallup U.S. Job Creation Index
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
  • Friday – Consumer Credit, Employment Situation

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