Economic hot spots were more like flickering embers than all-out blazes recently.
Gross Domestic Product (GDP) is still running lower than what is considered healthy. The final reading on second quarter GDP rose to 1.4 percent from the earlier reading of 1.1 percent. By comparison, a reading of 2.5 to 3 percent is considered optimal. GDP measures the pace of economic activity and represents the total dollar value of all goods and services produced over a specific time period. It has averaged just 2 percent since the recession ended in mid-2009.
Retail Sales dimmed in July and August. This was especially concerning since consumer spending drives our economy
and August is usually a big month for back-to-school sales. Despite this disappointing news, Consumer Confidence sparked in September, hitting its highest level since before the recession began in 2008. This followed an impressive gain in August.
Did Housing Sizzle or Fizzle?
The Commerce Department reported that August New Home Sales fell 7.6 percent from July to an annual rate of 609,000. This still beat expectations of 585,000. From August 2015 through August 2016, however, sales ignited and were up 20.6 percent.
August Existing Home Sales fell 0.9 percent from July to an annual rate of 5.33 million units, below expectations, according to the National Association of REALTORS®. Sales were up 0.8 percent from August 2015.
Housing Starts and Building Permits also slipped from July to August, though Housing Starts were up 0.9 percent from August 2015.
Home prices continued to light up. August home prices, including distressed sales, rose 6.2 percent year-over-year with a 1.1 percent gain from July to August, data analytics firm CoreLogic reported.
CoreLogic predicts home prices will be back to their April 2006 peak level in 2017.
Overall, despite these recent fizzles, the housing sector remains a bright spot in our economy.
Future Fire Starter?
The markets may feel the burn of uncertainty and volatility heading in to and out of the November 8 election. For now, home loan rates remain near historic lows.
If you have questions about how economic news and other headlines influence rates, don’t hesitate to contact me. Stay tuned for your next quarterly update in January.