Last Week’s Economic News in Review for August 28, 2019

Last Week’s Economic News in Review
August 28, 2019
Existing home sales rebounded, while new home sales tumbled, and layoffs enjoyed a decline.

Existing-Home Sales

Sales of existing single-family homes, townhomes, condominiums and co-ops, bounced back from June’s dip to rise 2.5 percent in July to hit an annual rate of 5.42 million, the National Association of Realtors reported last week. Compared to the same period a year ago, July’s sales were up 0.6 percent over July 2018’s pace of 5.39 million.

“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” NAR’s Chief Economist Lawrence Yun said in a public statement. However, he added that the supply of affordable housing is severely low. “The shortage of lower-priced homes have markedly pushed up home prices.”

Looking at price, July’s median price for existing homes of all types was $280,800, which was 4.3 percent higher than July 2018’s median of $269,300. This marked the 89th consecutive month of the year – over – year price gains.

Looking at supply, the number of existing homes for sale at the end of July fell to 1.89 million, representing a 4.2 – month supply at July’s sales pace. This was 1.6 percent below the 1.92 million homes for sale in June, and also down 1.6 percent from July 2018’s 1.92 million.

New Home Sales

Sales of new single-family homes plunged to an annual rate of 635,000 in July, a 12.8 – percent fall from June’s pace of 728,000, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. That said, compared to the same period a year ago, July’s new home sales were up 4.3 percent from July 2018’s rate of 609,000.

Moreover, while July was down, several housing market analysts quoted in last week’s news underscored the fact that the Bureau and Department revised June’s sales upward to a pace of 728,000, which meant June rose more than 20 percent over May.

“New home sales were sharply revised upward in June to a post-recession high annual rate of 728,000,” Robert Dietz, chief economist for the National Association of Home Builders, told Housing Wire. “While we continue to see volatility in the monthly numbers, sales continue to trend in a slightly positive direction and are in line with our forecast.”

Looking at the price, the median sales price of new houses sold in July was $312,800, which was 2.17 percent up from June’s median price of 306,000. In terms of supply, the number of new homes for sale at the end of July totaled 337,000, which represented a 6.4 – month inventory at July’s sales pace.

Initial Jobless Claims

First – time claims for unemployment benefits filed by recently unemployed Americans during the week ending Aug. 17 fell to 209,000, a drop of 12,000 claims from preceding week’s total of 221,000, the Employment and Training Administration reported last week.

The four – week moving average – regarded as a more reliable measure of initial jobless claims – ticked up to 214,500, an increase of 500 claims over the previous week’s average of 214,000. This marked the 233rd week in which initial claims were below the 300,000 – claim level, which economists consider an indicator of a growing job market.

This week, we can expect: Monday – Durable goods orders for July from the Census Bureau. Tuesday – Durable goods orders for July from the Census Bureau. Thursday – Initial jobless claims for last week from the Employment and Training Administration. Friday – Persona incomes and spending for July from the Bureau of Economic Analysis.

Madeline Gliege 
Union Bank

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