April 30th, 2019
Last week’s economic reporting included readings on sales of new and pre-owned homes; weekly reports on mortgage rates and new jobless claims were also released along with a report on consumer sentiment.
Sales of New Homes Hit 16-Month High
The Commerce Department reported that deep discounts offered by home builders boosted sales of new single-family homes to 692,000 sales on a seasonally-adjusted annual basis.
March sales exceeded February’s reading by 4.50 percent and exceeded the expected sales pace of 656,000 sales. The average price of new single family homes fell to $302,700 in March; this was 9.70 percent lower year-over-year.
Real estate pros reported higher inventory of new homes for sale with a six-month supply of homes for sale in March. A six-month supply of available homes indicates that housing markets were evenly balanced between homes for sale and prospective buyers.
Previously-owned homes sold at a seasonally-adjusted annual pace of 5.21 million sales in March. The National Association of Realtors® said that sales of pre-owned homes were 5.90 percent lower than the sales pace of 5.48 million pre owned homes posted for February and that March sales missed expectations of 5.35 million sales.
Sales were likely impacted by higher average sales price for pre-owned homes; the average selling price for pre-owned homes was $259,400, which was 3.80 percent higher year-over-year. Higher home prices challenge first-time and moderate income home buyers; this could explain the slower sales pace for pre-owned homes in March.
Mortgage Rates and New Jobless Claims Rise
Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed rate mortgages averaged 4.20 percent and were three basis points higher than for the prior week. Rates for 15-year fixed rate mortgages averaged two basis points higher at 3.64 percent; Rates for 5/1 adjustable rate mortgages fell one basis point and averaged 3.77 percent. Discount points for fixed rate mortgages averaged 0.50 percent and 0.40 percent for 5/1 adjustable rate mortgages.
First-time jobless claims jumped to 230,000 new claims filed as compared to the prior week’s reading of 193,000 new claims filed. Analysts said that more first-time claims were likely related to the Easter holiday and spring breaks.
According to the Consumer Sentiment Index for April, consumer sentiment rose to an index reading of 97.20 percent as compared to an expected reading of 97.0 and March’s reading of 96.9.
This week’s scheduled economic news includes readings from Case-Shiller, and Commerce Department readings on construction spending and pending home sales. The Federal Open Market Committee of the Federal Reserve will issue its post-meeting statement and Fed Chair Jerome Powell will give a press conference. ADP and Non-Farm Payrolls reports will be released along with the national unemployment rate.