EconUpdate by P. Duffy
New home sales slump 5.9 percent in May, but up 9.2 percent year-on-year
What does this mean? A surge in new home prices over the past year is being blamed for the slowdown from April.
Sales of new single‐family houses in May 2021 were at a seasonally adjusted annual rate of 769,000. This is 5.9 percent below the revised April rate of 817,000, but is 9.2 percent above the May 2020 estimate of 704,000. The seasonally‐adjusted estimate of new houses for sale at the end of May was 330,000, or a supply of 5.1 months at the current sales rate, up from 4.6 months in April
Existing home sales slip 0.9 percent in May, but up 44.6 percent year-on-year
What does this mean? Although inventory has improved slightly, the lack of listings is continuing to fuel higher prices and limit sales.
Existing home sales fell for the fourth consecutive month in May (this time by 0.9 percent), but were still up 44.6 percent from the lows of 2020, and are approaching pre-pandemic levels. The median existing-home price in May was $350,300, up 23.6 percent from May 2020, and every region registered price increases. Unsold inventory sits at a 2.5-month supply at the present sales pace, edging up from April’s 2.4-month supply but down from 4.6 months in May 2020.
Purchase loan apps rise 1 percent from previous week, but down 14 percent year-on-year
What does this mean? A 7-point increase in mortgage rates meant fewer purchase loans compared with this same time of 2020.
The Market Composite Index for mortgage applications increased 2.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 1 percent (but down 14 percent year-on-year) and refinance activity rising 3 percent (but down 9 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.18 percent from 3.11 percent.