News & Events

Economic Advisor: May 2, 2018
May 2, 2018


 

Existing home sales grew for the second month in a row, and new home sales climbed as well. Meanwhile, layoffs enjoyed an almost historic drop.

Existing Home Sales

Sales of existing single-family homes, townhomes, condominiums and co-ops, hit an annual rate of 5.6 million in March, which was 1.1 percent higher than February’s rate of 5.54 million, the National Association of Realtors reported last week. That said, when compared to the same period last year, sales were still 1.2 percent below March 2017’s rate.

“Robust gains last month in the Northeast and Midwest — a reversal from the weather-impacted declines seen in February — helped overall sales activity rise to its strongest pace since last November at 5.72 million,” NAR Chief Economist Lawrence Yun said in a public statement.

However, Yun noted that sales were lagging due to “woefully low” inventory levels that were pushing home prices out of reach of many buyers.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West,” he added.

To that point, the median price for existing homes hit $250,400, which was 5.8 percent higher than March 2017’s median price of $236,600. March’s existing home inventory grew 5.7 percent over February to hit 1.67 million homes for sale. That said, this was 7.2 percent below March 2017’s 1.8 million-home supply.

New Home Sales

New home sales also saw good news. Sales of new single-family homes in March grew to an annual rate of 694,000, which was 4 percent higher than February’s rate of 667,000, according to last week’s joint report from the Census Bureau and the Department of Housing and Urban Development. Compared to the same period a year ago, this was 8.8 percent over March 2017’s pace of 638,000.

Looking at price and supply, the average sales price of new homes sold in March was $369,900 and the median price was $337,200. The inventory of new homes for sale at the end of March was 301,000, which represented a 5.2-month supply at March’s sales rate.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending April 21 plummeted to 209,000, a plunge of 24,000 claims from the prior week’s total of 233,000, according to last week’s report from the Employment and Training Administration. This was the lowest level since December 6, 1969’s 202,000.

The four-week moving average, which is considered a more stable measure of jobless claims, dipped to 229,250, a decline of 2,250 claims from the preceding week’s average of 231,500 claims.

This latest report marked the 164th straight week that initial claims have come in below the 300,000-claim level, which economists consider an indicator of a growing job market. The Administration added that it continues to experience hurricane-related reporting difficulties in the Virgin Islands and Puerto Rico.

This week, we can expect:

  • Monday — Personal incomes and spending for March.
  • Tuesday — Construction spending for March from the Census Bureau; car and truck sales for April from the auto manufacturers.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; factory orders for March from the Census Bureau; the trade deficit for March from the Bureau of Economic Analysis.
  • Friday — Unemployment rate, payrolls, average hourly earnings, and average workweek for April from the Bureau of Labor Statistics.

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