Last Week’s Economic News in Review April 28, 2021

April 28, 2021

Existing home sales fell while new home sales increased, and layoffs continued to contract.

Existing Home Sales

Transactions of existing single-family homes, townhomes, condos and co-ops dropped 3.7 percent from February to an annual rate of 6.01 million, according to last week’s report from the National Association of Realtors. While down for the month, when compared to the same period a year ago, March’s sales were 12.3 percent higher than March 2020’s pace of 5.35 million.

That said, this marked the second month of declines in a row. NAR (National Association of Realtors) Chief Economist Lawrence Yun attributed the poor sales to insufficient inventory pushing prices too high.

“Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market,” Yun said. “The sales for March would have been measurably higher, had there been more inventory.”

Looking at inventory, the number of existing homes for sale at the end of March was 1.07 million units, which represented a 2.1 month supply at March’s sales pace. March’s inventory was up 3.9 percent from February’s inventory and was 28.2 percent below March 2020’s supply of 1.49 million units.

March’s median price for all existing homes of all types was $329,100, which was 17.2 percent higher than March 2020’s median price of $280,700. This was the 109th consecutive month of year-over-year gains.

New Home Sales

Meanwhile, sales of new, single-family homes skyrocketed to an annual rate of 1.02 million in March, which was 20.7 percent over February’s pace of 846,000, the Census Bureau and the Department of Housing and Urban Development reported last week.

March’s sales were well over economists’ expectations of a much smaller rise to an annual rate of 888,000 for the month. Moreover, when compared to the same period a year ago, March’s sales were a whopping 66.8 percent higher than March 2020’s pace of 612,000.

Looking at pricing, the median price for new single-family homes sold in March was $330,800, which was 0.79 percent higher than March 2020’s median price of $328,200.

In terms of inventory, the estimated number of new homes for sale at the end of March totaled 307,000, representing a 3.6-month supply at March’s sales rate.

“This is the best new home sales report in 10 years,” HousingWire Lead Analyst Logan Mohtashami said in a report from the publication. “We’ve essentially got a trifecta – so headline number is great, revised numbers are great, but monthly supply is below 4.3 months.”

Initial Jobless Claims

First-time claims for unemployment benefits filed by recently unemployed Americans during the week ending April 17th dropped to 547,000, which was 39,000 claims below the preceding week’s revised total of 586,000, the Employment and Training Administration reported last week.

This was well below economists’ forecast of 603,000 claims and marked the lowest level for initial claims since the week ending March 14, 2020 posted 256,000 claims.

Similarly, the four-week moving average – regarded as a more reliable measure of jobless claims – fell to 651,000 claims, which was 27,750 claims down from the previous week’s revised average of 678,750.

This week, we can expect:

Monday – Durable goods orders for March from the Census Bureau.

Tuesday – Consumer confidence for April from The Conference Board.

Wednesday – Trade in goods for March from the Census Bureau and the Bureau of Economic Analysis.

Thursday – Initial jobless claims for last week from the Employment and Training Administration; gross domestic product for the First Quarter from the Bureau of Economic Analysis.

Friday – Personal incomes and spending for March from the Bureau of Economic Analysis; consumer sentiment for April from the University of Michigan Survey of Consumers.

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Omar Khamisa
Owner
Mission San Jose Mortgage
2111 W. March Lane, Suite B100
Stockton, CA 95207
Office: 209-651-2000
Mobile: 510-648-5535
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Omar@MSJMortgage.com

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