Last Weeks Economic News In Review

Last Weeks Economic News In Review

Last Week's Economic News in Review    

  Existing home sales saw a healthy jump both in terms of volume and price, while new home sales hit a new high, and lay-offs saw a slight increase. 

Existing Home Sales 

Sales of existing single-family homes, townhomes, condominiums and co-ops rose 5.1 percent in May to an annual rate of 5.35 million from April’s 5.09 million pace, the National Association of Realtors reported last week. Compared to the same period last year, sales were up 9.2 percent, marking the eighth consecutive month of year-or-year gains. 

The increase was due to a combination of an increase in first-time buyers, as well as more homes on the market, according to NAR Chief Economist Lawrence Yun.

“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” Yun explained. “However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”

In terms of price, the median price for existing homes of all types in May hit $228,700, which was 7.9 percent over May 2014. This marked the 39th straight month of year-over-year price increases, and was the highest sales price in nearly six years. 

New Home Sales 

Similarly, sales of new homes in May shot past market expectations of an annual rate of 525,000 to hit a pace of 546,000, according to last week’s figures released by the Census Bureau and the Department of Housing and Urban Development. This 2.2 percent increase over April’s revised rate of 534,000 marked a seven-year high, and was a strong 19.5 percent over May 2014’s estimated rate of 457,000. 

Looking at price, the median sales price of new homes sold in May was $282,800, and the average sales price was $337,000. In terms of inventory, there were an estimated 206,000 new homes on the market at the end of May, which constituted a 4.5-month supply based on May’s sales rate. 

Real estate market experts pointed to the increasing demand for homes as an indicator of future increases in home construction. 

“Look for significant increases in housing starts — we have to catch up to these demand numbers,” Societe Generale’s chief U.S. economist Aneta Markowska told Bloomberg. “This could be the best year for housing in terms of how much it contributes to GDP since 2012.” 

Initial Jobless Claims 

First-time claims for jobless benefits filed by the newly laid off during the week ending June 20, ticked up to 271,000, a gain of 3,000 claims from the preceding week’s revised level of 268,000, the Employment and Training Administration reported last week. 

The four-week moving average — considered a more stable measure of lay-off activity — dipped to 273,750, a decline of 3,250 claims from the previous week’s revised average of 277,000. 

“Claims remain low, consistent with employment growth staying more than strong enough to keep the unemployment rate trending down,” High Frequency Economics’ chief U.S. economist Jim O’Sullivan wrote in a client statement. 

This week we can expect:
  • Tuesday — June consumer confidence from The Conference Board.

  • Wednesday — May construction spending from the Census Bureau; June car and truck sales from the auto manufacturers.

  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; May factory orders from the Census Bureau; June unemployment rate, payrolls, earnings and workweek from the Bureau of Labor Statistics.

 


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Dated: June 30th 2015
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