News & Events

Economic Advisor: August 1, 2018
August 1, 2018


 

Sales of existing homes and new homes both fell, while layoffs increased.

Existing Home Sales

Sales of existing single-family homes, townhomes, condominiums and co-ops, dropped 0.6 percent to an annual rate of 5.38 million in June, according to last week’s report from the National Association of Realtors. This marked the third consecutive monthly decline in sales, and when compared to the same period a year ago, June’s sales were down 2.2 percent from June 2017’s rate.

The median price for existing homes of all types reached an all-time high of $276,900 and marked the 76th consecutive month of year-over-year price gains. When compared to last year, June’s median price was 5.2 percent higher than June 2017’s $263,300.

June’s inventory of existing homes grew 4.3 percent to 1.95 million units for sale, representing a 4.3-month supply at June’s sales rate. Compared to the same period a year ago, this was 0.5 percent higher than June 2017’s 1.94 million and was the first year-over-year inventory increase since June 2015.

While the bump in inventory was welcome, the continued decline in sales volume is the result of a “severe housing shortage,” according to Lawrence Yun, chief economist for NAR.

“This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales,” he said in a statement from NAR. “It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels,” added Yun. “Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

New Home Sales

The news for new home sales was very similar. Sales of new single-family homes in June dipped to an annual rate of 631,000, which was 5.3 percent down from May’s pace of 666,000, and marked the second monthly decline in a row, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. That said, when compared to a year ago, June’s sales were 2.4 percent higher than the June 2017’s rate of 616,000.

In terms of price, June’s median price for new homes sold was $302,100 and the average sales price was $363,300. In terms of inventory, the estimated number of new homes for sale at the end of June totaled 301,000, representing a 5.7-month supply.

Initial Jobless Claims

First-time claims for unemployment benefits filed by laid-off Americans during the week ending July 21 rose to 217,000, an increase of 9,000 claims from the preceding week’s total of 208,000, the Employment and Training Administration reported last week.

Meanwhile, the four-week moving average — regarded as a more reliable measure of initial jobless claims — ticked down to 218,000, a dip of 2,750 claims from the prior week’s average of 220,750. Last week’s report also marked the 177th 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:

  • Tuesday — Personal incomes and spending for June from the Bureau of Economic Analysis; consumer confidence for July from The Conference Board.
  • Wednesday —  Construction spending for June from the Census Bureau and Department of Housing and Urban Development; car and truck sales for July from the auto manufacturers.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Unemployment rate, payrolls, hourly earnings and average workweek for July from the Bureau of Labor Statistics; the balance of trade for June from the Bureau of Economic Analysis.

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