Existing home sales rebounded, while new housing construction retreated, and layoffs continued to fall to historic lows.
Existing Home Sales
Existing home sales bounced back in April with transactions of single-family homes, townhomes, condominiums, and co-ops growing 5.1 percent to an annual rate of 5.33 million in March, the National Association of Realtors reported last week. “Closings came back in force last month as a greater number of buyers — mostly in the Northeast and Midwest — overcame depressed inventory levels and steady price growth to close on a home,” NAR Chief Economist Lawrence Yun said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.” The median price for existing homes of all types in March grew to $222,700, which marked a 5.7 percent increase over March 2015’s $210,700. Looking at inventory, March’s supply of existing homes increased 5.9 percent to 1.98 million units for sale, marking a 4.5-month supply, but when compared annually was down 1.5 percent from March 2015. Price and supply will continue to be key influences on overall sales volume.
Housing starts dropped to their lowest level since October, with construction starts on private housing in March falling to an annual rate of 1,089,000, an 8.8 percent decline from February’s rate of 1,194,000, according to last week’s report from the Census Bureau. That said, March’s starts were 14.2 percent over March 2015’s rate of 954,000. Starts on single-family homes in March dipped to a rate of 764,000, which was 9.2 percent below February’s pace of 841,000. Building permits issued in March for construction of private housing dropped to an annual rate of 1,086,000, which was 7.7 percent below February’s rate of 1,177,000 but was 4.6 percent over March 2015’s rate of 1,038,000. Permits for single-family homes in March dipped to a rate of 727,000, which was 1.2 percent below February’s pace of 736,000. That decreasing pace of permits worried Joel Naroff of Naroff Economic Advisors Inc. “That is somewhat more worrisome as the permit demand has lagged starts for the last two months,” Naroff told the Wall Street Journal, adding that declining permits “could signal continued softness in the market.”
Initial Jobless Claims
Layoffs continued to fall with first-time claims for unemployment benefits filed during the week ending April 16 dropping to 247,000, a decline of 6,000 from the preceding week’s level of 253,000, the Employment and Training Administration reported last week. This marked the lowest level for initial claims since November 24, 1973’s 233,000, and was the 58th straight week of initial claims being below 300,000, a level economists consider indicative of a growing job market. The four-week moving average — considered a more stable measure of unemployment activity — dropped to 260,500, a decrease of 4,500 from the prior week’s average of 265,000. This week we can expect:
- Monday — New home sales for March from the Census Bureau.
- Tuesday — Durable goods orders for March from the Census Bureau; April consumer confidence from The Conference Board.
- Thursday — First quarter GDP from the Bureau of Economic Analysis; initial jobless claims for last week from the Employment and Training Administration.
- Friday — Personal incomes and spending for March from the Bureau of Economic Analysis; consumer sentiment for April from the University of Michigan.