Purchase applications for home mortgages fell 1 percent on a seasonally adjusted basis during the week of June 16th. The unadjusted purchase index is 9 percent above the level it was during the same week one year ago. The refinancing share of mortgage applications rose 1.2 percent to 46.6 percent of all home mortgage applications being for refinances; it increased 2 percent from the previous week to the highest level since November, when the presidential election took place and rates substantially increased. The weekly seasonally adjusted decline in purchase applications, which follows last week’s decline from the week of June 2nd when the purchase index reached the highest level it’s been since November 2009. The current 9 percent year on year gain indicates that prospective home buyers have been exceptionally active in June.
Existing Home Sales
In previous months housing has been sliding, but May’s existing housing report shows a very solid 1.1 percent rebound to a higher than expected annualized rate of 5.620 million. Today’s report includes gains for single family homes, up 1.0 percent to a 4.980 million rate and also condos are up 1.6 percent6 to a rate of 640,000. The median price rose 3.2 percent to $252,800.On a yearly basis the median is up 5.8 percent showing seller strength relative to a 2.7 percent gain for on-year sales. Another positive in the report is supply which is strengthened by the increase in prices, increased to 1.960 million vs. 1.920 in April and 1.8010 million in March. Relative to sales, supply is at 4.2 months compared to 4.1 and 3.8 in the two prior months. The housing sector opened the year strong then fizzled ou6t during the spring selling season. This report shows limited weakness in the housing sector and should confirm expectations of a bounce back in housing
Jobless claims are little changed in the latest report and remain consistent with demand for labor. Initial claims came in at 241,000 for the week of June 17th; this is right in line with economists’ predictions of 240,000. The week of June 17th also happens to be the sample week for the upcoming June employment report, compared to the sample week of the May employment report, there is a slight increase of only 8,000. The four week average is up very slightly to a level of 244,750 that is only marginally above the four week average mid-May which was at a level of 241,000. Continuing claims data lags by a week and are again little changed at 1.944 million for an increase of only 8,000. The continuing claims four week average is up 5,000 to 1.932 million. The unemployment rate for insur4ed workers, excluding job leavers and re entrants is unchanged and remains at a very low level of 1.4 percent. The readings throughout this report are at historic lows as employers hold on to their employees.
FHFA House Price Index
Though sales may be uneven, home prices are on the rise. The FHFA’s house price index jumped 0.7 percent in April with March revised 1 tenth higher and is now also at a lev el of 0.7 percent. The yearly rate is up 4 tenths to 6.8 percent which is the best showing in 3 years! Though the housing sector may have fumbled in the spring selling season, home prices are one of the high points of the nation’s economic data and are a major positive for household wealth.
New Home Sales
After a disappointing spring season for the housing sector, housing is back on track, following the strength in the existing home sales market report. New home sales rose a very solid 2.9 percent to an annualized rate of 610,000, near economists’ top estimate. The report also includes a shar4p 24,000 upward revision to April to a level that now stands sat6 593,000. This report, similar to the existing home sales report, shows great strength in the selling prices with the median surging11.5 percent in the month to $345,800. The year on year increase is 16.8 percent which is nearly double the 8.9 percent gain in actual sales. This price traction is related no only to demand but also to supply of new homes which remains very tight. New homes however did move into the market during the month, up 1.5 percent to 268,000 units, but sales relative to supply remain unchanged at only 5.3 months.