April was a positive month for the housing market with new home sales and pending home sales breaking monthly and yearly record levels. Both are signs that the spring homebuying season has gained significant traction.
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New home sales in April came in at an astounding annualized rate of 619,000, which is the highest rate since January 2008, according to Bloomberg. Not only is this the largest rate of the recovery but the biggest monthly surge (16.6 percent) since 1992. Year-over-year new home sales are up 23.8 percent.
Pending home sales also experienced an influx last month, with the index up 5.1 percent. The high-end consensus range was calling for only a 1.2 percent gain, but this report marks the third straight month of gains for pending home sales and the highest level of contracted home sales in over a decade, according to the Wall Street Journal.
First-quarter gross domestic product (GDP), the broadest measure of economic activity, was revised slightly higher to an annualized growth rate of plus 0.8 percent. This is a 0.3 percent gain from initial estimates and within the consensus range.
Last week in the economy:
- After hitting their lowest levels since February in the May 13 week, purchase applications were up by 5 percent for the week of May 20. Despite the week’s prior drop, MBA Mortgage Applications are up 17 percent higher year-over-year. The refinance sector saw a 0.4 percent gain despite higher mortgage rates.
- Initial Jobless Claims fell another 10,000 in the May 21 week to 268,000. The 4-week average is up 8,000, though, due to three prior weeks of increases.
- The Federal Housing Finance Agency (FHFA) House Price Index saw an unexpected gain of 0.7 percent in March despite previous readings remaining relatively flat. This is the best reading since September 2015.
- Bloomberg Consumer Comfort trended lower in the May 22 week, falling 0.6 points to 42. At the beginning of 2016, consumer comfort trended near 44.
- Consumer Sentiment for May came in at 94.7. Though down 1.1 points from mid-month, the index was up a strong 5.7 points from April and at the best level since June 2015.
What’s on economic calendar for the week of May 30, 2016:
- Tuesday – Consumer Confidence
- Wednesday – MBA Mortgage Applications, ADP Employment Report, Gallup U.S. Job Creation Index
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Employment Situation