New Home Sales a Bright Spot
A discouraging word was heard on existing home sales, but new home sales were not cloudy all day.
New home sales were a bright spot, edging higher in June. The Commerce Department reported new home sales rose a modest 0.8 percent from May to an annual rate of 610,000 units, which was in line with estimates. From June 2016 to June 2017, new home sales rose 9.1 percent.
Existing homes sales slipped, though, falling 1.8 percent from May to June to an annual rate of 5.52 million units, below the 5.58 million expected. The National Association of
REALTORS® (NAR) said sales were up only 0.7 percent year-over-year, the second lowest reading of
2017. NAR explained that the decline in sales was due in part to the ongoing theme: a low supply of homes for sale on the market. Total housing inventory was at a 4.3-month supply at the June sales pace and has fallen year-over-year for 25 consecutive months. Normal inventory levels are around six
Home price gains remain steady as demand for homes continues to outweigh supply in many key areas across the nation. The May S&P/Case-Shiller 20-City Index rose 5.7 percent year-over-year, in-line with estimates and just below 5.8 percent in April.
In other news, the first estimate of second-quarter Gross Domestic Product (GDP) was solid, increasing at a rate of 2.6 percent, the Bureau of Economic Analysis reported. Consumer spending, which accounts for two-thirds of our nation’s economic activity, fueled the increase. First-quarter GDP was revised lower, increasing 1.2 percent rather than the 1.4 previously reported.
Finally, the Federal Reserve released a rather dovish monetary policy statement following its Federal Open Market Committee meeting. As expected, the benchmark Federal Funds Rate remained unchanged. The Fed noted it expects inflation to remain tame for some time, which is typically good news for mortgage bonds and the home loan rates tied to them.
At this time, home loan rates remain just above historic lows.
• Pending Home Sales kick-off the week Monday.
• Manufacturing data releases start Monday as well, with the regional Chicago PMI report, followed by the ISM Index on Tuesday.
• Also on Tuesday, look for the inflation-measuring Personal Consumption Expenditures along with
Personal Income and Personal Spending.
• The ISM Services Index will be released Thursday.
• Employment data is plentiful, starting with Wednesday’s release of the ADP National Employment Report, Thursday’s release of weekly Initial Jobless Claims and Friday’s Jobs Report for July, which includes Non-Farm Payrolls and the Unemployment Rate.
If you or someone you know has questions aboutSelling or Buying a Luxury Home or Mansion, please contact Alan Ripa, P.C. He would be happy to help.