Last week’s economic reports included readings on pre-owned home sales, weekly reports on mortgage rates and new jobless claims and consumer sentiment. The weekly news cycle was shorter due to the Thanksgiving holidays on Thursday and Friday.
Sales of Previously–Owned Homes Jump in October
Sales of previously owned homes grew by 1.20 percent in October as compared to September’s reading of 0.10 percent growth month-to-month and indicated a seasonally adjusted annual rate of 5.48 million sales. October home sales increased as inventories of available homes declined. There was a 3.90 months supply of homes in October as compared to a 4.40 months supply of available homes in September. Real estate pros typically consider a six-month supply of homes a healthy balance between homes available and potential home buyers.
Analysts said that October’s inventory of homes for sale was the second lowest on record from 1999 to present. The National Association of Realtors®, which produces the Existing Home Sales report, said that sales to date were 4.60 percent higher year-to-date.
All regions tracked by the National Association of Realtors® reported increased sales of previously owned homes. The Northeast posted a 4.20 percent gain; the Midwest posted a gain of 0.80 percent and the South posted a gain of 1.90 percent. The West posted the highest gain in pre-owned home sales with 2.40 percent growth rate.
Analysts expect sales of pre-owned homes to rise by 3.70 percent in 2018; proposed revisions to tax laws could sideline home buyers if homeownership is “dis-incentivized” by tax reforms.
Mortgage Rates Mixed, New Jobless Claims Lower
Freddie Mac reported mixed results for average mortgage rates. The rate for 30-year fixed rate mortgages fell three basis points to 3.92 percent. Average rates for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages each rose by one basis point to 3.32 percent and 3.22 percent respectively. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.
New jobless claims were lower last week with 239,000 new claims filed. Analysts expected 240.000 new claims as compared to the prior week’s reading of 252,000 new claims.
The University of Michigan’s Consumer Sentiment Index fell from an index reading of 100.7 in October to 98.5 in November. This was the second highest reading in thirteen years. Consumer sentiment remains high despite headwinds including potential tax reform.
This week’s scheduled economic readings include reports on new and pending home sales, Case-Shiller Home Price Indices and inflation will be released. Weekly readings on mortgage rates and new jobless claims will also be released. If you’re in the market for a new home, please be sure to reach out to your local Mason Mac loan officer today.