Last Week’s Economic News in Review (September 1st, 2021)
September 1st, 2021
Existing home sales grew as did new home sales, while layoffs also increased.
Existing Home Sales
Transactions of existing single-family homes, townhomes, condos and co-ops rose 2 percent in July to an annual rate of 5.99 million, according to last week’s report from the National Association of Realtors. Compared to the same period a year ago, June’s sales were 1.5 percent higher than July 2020’s pace of 5.90 million. This marked the second month of growth for existing home sales.
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” Lawrence Yun, NAR’s chief economist, noted in comments accompanying the association’s report. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
Giving inventory a closer look, the number of existing homes for sale at the end of July was 1.32 million units, which represented a 2.6-month supply at July’s sales pace. July’s inventory was up 7.3 percent from June’s inventory but was 12 percent below July 2020’s supply of 1.50 million units.
That monthly inventory gain helped push July’s median price for all existing homes of all types down 9.3 percent from June to $359,900. That said, July’s median price was 17.8 percent higher than July 2020’s median price of $305,600. This was the 113th consecutive month of year-over-year gains.
New Home Sales
Sales of new, single-family homes grew to an annual rate of 708,000 in July, which was 1 percent up from June’s revised pace of 701,000, the Census Bureau and the Department of Housing and Urban Development reported last week.
July’s sales exceeded economists’ expectations of a drop to an annual rate of 700,000 for the month, but when compared to the same period a year ago, July’s sales were 27.2 percent below July 2020’s pace of 972,000.
Looking at pricing, the median price for new single-family homes sold in July was $390,500, which was 7.9 percent higher than June’s median price of $361,800 and 18.4 percent higher than July 2020’s median price of $329,800.
Looking at inventory, the estimated number of new homes for sale at the end of July totaled 367,000, representing a 6.2-month supply at July’s sales rate.
Initial Jobless Claims
In employment news, first-time claims for unemployment benefits filed by recently unemployed Americans during the week ending August 21st rose to 353,000, a gain of 4,000 claims from the previous week’s revised total of 349,000, the Employment and Training Administration reported last week.
This was close to economists’ expectations of initial jobless claims of 350,000.
The four-week moving average, which is considered a more stable measure of jobless claims, dropped to 366,500, which was 11,500 claims down from the preceding week’s average of 378,000 claims.
This week, we can expect:
Tuesday – Consumer confidence for August from The Conference Board.
Wednesday – Construction spending for July from the Census Bureau and Department of Housing and Urban Development; new car and trucks sales for August from the auto manufacturers.
Thursday – Balance of trade and factory orders for July from the Census Bureau; Initial jobless claims for last week from the Employment and Training Administration.
Friday – Payrolls, hourly earnings and unemployment for August from the Bureau of Labor Statistics.
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Omar Khamisa
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Mission San Jose Mortgage
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