EconUpdate by P. Duffy
New home sales slip 5.9 percent in April, but up 48.3 percent year-on-year
What does this mean? Rising cost pressures and higher prices are impacting the supply side, but demand remains strong.
Sales of new single‐family houses in April 2021 were at a seasonally adjusted annual rate of 863,000, down 5.9% from March but up 48.3% from last April’s pandemic-induced low. Months of supply rose from 4.0 in March to 4.4 months in April, which compares with 6.6 months in April 2020. Although the median sales price rose 11.4% from March to $372,400 in April, this metric can be volatile, and compares with $373,000 in January 2021 (a slight decline), but is up 20.1% from $310,100 in April 2020.
Case-Shiller index reports 13.2 percent annual gain in March, highest rise since Dec. 2005
What does this mean? Incredibly strong demand vs. very low inventory continues to put pressure on pricing.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 13.2% annual gain in March, up from 12.0% in the previous month, and marking the sharpest annual rise since December 2005. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.5%.
Purchase apps up 2 percent but down 4 percent year-on-year
What does this mean? Rising home prices are beginning to dent home sales, but interest rates remain low.
The Market Composite Index for mortgage apps decreased 4.2 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 2 percent (but down 4 percent year-on-year) and refinance activity falling 7 percent (and down 9 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages increased to 3.18 percent from 3.15 percent.