Last Week’s Economic News in Review

Existing home sales rebounded, while housing starts were down and layoffs dropped as well.

Existing Home Sales 

After three consecutive monthly declines, sales of existing single-family homes, townhomes, condominiums and co-ops, rose 0.7 percent in September to hit an annual rate of 5.39 million, according to last week’s report from the National Association of Realtors. That said, existing home sales have a way to go. Compared to September 2016, last month’s sales rate was still down 1.5 percent.

“Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,†NAR Chief Economist Lawrence Yun said. “Realtors this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers.”

Looking at price, September’s median price for existing homes of all types came in at $245,100, which was 4.2 percent higher than September 2016's $235,200. This marked the 67th consecutive month of year-over-year gains.

Inventory saw some growth, with the supply of existing homes at the end of September expanding 1.6 percent to 1.9 million units available for sale, but compared to last year, this was 6.4 percent lower than September 2016’s 2.03 million homes. All told September’s unsold inventory represented a 4.2-month supply at September’s sales pace.

Housing Starts

Unfortunately, while inventory is an essential element in seeing sales expand, starts on construction of private housing in September fell 4.7 percent to an annual rate of 1.12 million, the Census Bureau reported last week. That said, when compared to last year, September’s starts were 6.1 percent higher than September 2016’s pace of 1.06 million.

Permits issued for the construction of private housing issued in September fell to an annual rate of 1.21 million, which was down 4.5 percent from August’s rate of 1,272,000. Compared to last year, it was 4.3 percent below September 2016’s pace of 1.27 million.

Looking specifically at single-family homes, construction starts on those units fell to an annual rate of 829,000, which was 4.6 percent below August’s rate of 869,000. Permits issues for construction of single-family homes during September fell to a rate of 819,000, which was 2.4 percent below August’s pace of 800,000.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending October 14 fell to 222,000, a drop of 22,000 claims from the preceding week’s total of 244,000, the Administration reported last week. The Administration added that the impacts of hurricanes Harvey, Irma, and Maria continued to skew layoffs data.

The four-week moving average – regarded as a more reliable measure of initial jobless claims – was also thrown off, declining to 248,250 claims, a fall of 9,500 claims from the prior week’s average of 257,750. Despite the storms, this marked the 137th week in which initial claims were below the 300,000-claim level, which economists consider is an indicator of a growing job market.

This week, we can expect:

  • Wednesday — Durable goods orders and new home sales for September from the Census Bureau.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Consumer sentiment for October from the University of Michigan Surveys of Consumers; and third quarter gross domestic product from the Bureau of Economic Analysis.

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