In this week’s economic review, new home sales hit a major stride, home prices increased, and consumer sentiment came in at a 13-year high.
New Home Sales
After an unexpected 3.4 percent drop in August, new home sales were anticipated to fall 0.9 percent in September; instead, they surged 18.9 percent, the highest increase since January 1992. The spike in sales did not come from price concessions as the median home price jumped 5.2 percent.
Despite hurricane relief in the south, all four regions posted sales gains. With sales skyrocketing in September, inventory of new homes stood at 279,000 which equates to a 5-month supply.
FHFA House Price Index
The index rose 0.7 percent in August, nearly doubling the 0.4 percent median forecast. July’s index was upwardly revised from a 0.2 percent increase to 0.4 percent. Year-over-year the index stands at +6.6 percent.
The first reading of third quarter GDP was higher than expected with the U.S. economy growing at a 3 percent rate. With the second quarter GDP at +3.1 percent, the two quarters represent the “fastest six-month period of growth since 2014,” according to NPR.
Consumer confidence had a small drop in October after hitting record highs earlier in the month. The index level hit 100.7 for the month, slightly below the 100.9 estimate. Though lower than consensus levels, October marks the second time the month-end figures have surpassed the 100-level mark since the 1990’s.
This week in the economy:
- Mortgage rates have increased as of October 26th. The 30-year average fixed rate was 3.94 percent with 0.5 points, according to Freddie Mac.
- Purchase applications fell 4.6 percent in the week of October 20, completely reversing the previous week’s gain. Refinancing applications followed suit with another gain reversal, dropping 3 percent. Despite the decrease, the share of refinance activity climbed nearly a full percentage point to comprise 49.5 percent of the market.
- In the week of October 21, initial jobless claims increased by 10,000 at 233,00 but still came in below expectations.
- The Bloomberg Consumer Comfort Index saw little change in the week of October 26, up just 0.1 points to a level of 51.1.
The economic calendar for the week of October 30th, 2017:
- Monday – Consumer Spending
- Tuesday – Case-Shiller Home Price Index, Consumer Confidence Index
- Wednesday – MBA Mortgage Applications, FOMC Announcement, ADP Employment Report
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Pending Home Sales Index
- Friday – Employment Report
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