|Home Sales Up, Construction Down
May New Home Sales surged. The Commerce Department reported that New Home Sales in May jumped nearly 3 percent from April to an annual rate of 610,000, above the 599,000 expected and marking the second highest tally of 2017. From May 2016 to May 2017, sales were up almost 9 percent.
May Existing Home Sales also edged higher 1.1 percent from April to an annual rate of 5.62 million units, above the 5.52 million expected. Sales were up 2.7 percent from May 2016.
Tight inventories for both existing and new homes continue to push home prices up.
While new construction could help offset the inventory shortage, Housing Starts fell for the third straight month, dropping 5.5 percent in May from April to the lowest rate since September 2016. Single-family starts fell to the lowest level in eight months. Housing Starts were down 2.4 percent from May 2016.
Building Permits, a sign of future construction, also fell 5 percent from April to May.
Retail and Labor Sectors Mixed
Mixed job data, lackluster consumer spending and tame inflation benefited Mortgage Bond prices and home loan rates.
Retail Sales in May saw the biggest decline since January 2016, falling 0.3 percent from April, per the Commerce Department. Retail Sales were up nearly 4 percent from a year ago. Retail Sales are an important indicator of our nation’s economy because consumer spending makes up nearly two-thirds of economic activity.
Employers added 222,000 new jobs in June, for an average monthly gain of 180,000 jobs in 2017. On average 187,000 new jobs were created per month in 2016. Average hourly earnings were stagnant at just a 2.5 percent gain over June of last year.
Consumer inflation remained tame in May. Year over year, the Consumer Price Index (CPI) fell to 1.9 percent after hitting 2.7 percent four months prior. Wholesale inflation as measured by the Producer Price Index (PPI) was unchanged in May due to lower energy costs.
If you have any questions about current rates, which remain near historic lows, please don’t hesitate to ask. Stay tuned for your next quarterly update in October.