Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.
New Home Sales Dip in September
Commerce Department readings indicated fewer sales of new homes than in August. 701,000 sales were reported in September on a seasonally-adjusted annual basis; 706,000 new homes were sold in August and analysts expected 700,000 sales of new homes.
Sales fell by 0.70 percent month-to-month but were 15.50 percent higher year-over-year. September was the second time in 12 years that new home sales exceeded 700,000 in consecutive months.
Sales of new homes were lower in three of four regions. Sales fell by -2.80 percent in the Northeast and were -3.80 percent lower in the West. New home sales fell -0.20 percent in the South but rose +6.30 percent in the Midwest. The median sale price of new homes fell in September, which indicated that builders may be building more affordable homes.
In recent years, builders concentrated on building high-end homes. Real estate pros said there was a 5.50 month supply of new homes available in September as compared to the benchmark reading of a six month supply of homes for sale that indicates markets are balanced between home buyers and sellers.
Sales of pre-owned homes also fell in September.5.38 million previously-owned homes were sold on a seasonally-adjusted annual basis. Analysts expected 5.40 million sales and 5.50 million pre-owned homes were sold in August.
Mortgage Rates Rise; Initial Jobless Claims Fall
Freddie Mac reported higher mortgage rates last week as the average rate for a 30-year fixed-rate mortgage rose six basis points to 3.75 percent. The average rate for a 15-year fixed-rate mortgage rose three basis points to 3.18 percent.
Rates for 5/1 adjustable rate mortgages averaged 3.40 percent and were five basis points higher. Discount points averaged 0.50 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
New jobless claims fell last week; 212,000 first-time claims were filed. Analysts expected 215,000 claims based on the prior week’s reading of 218,000 initial claims. Analysts said there were no indications of rising layoffs and noted that new jobless claims stayed near a 50-year low.
October’s Consumer Sentiment Index fell to an index reading of 95.50 as compared to September’s reading of 96.00. Consumers surveyed were less anxious about trade disputes with China than in September.
Readings for the University of Michigan’s consumer sentiment index have held steady in recent months, but remain below the post-recession peak reading of 101.40.
What’s Ahead
This week’s scheduled economic news includes readings from Case-Shiller on home prices and a statement from the Fed’s Federal Open Market Committee on monetary policy decisions.
The Labor Department also reports on Non-Farm Payrolls and national unemployment is also scheduled along with weekly readings on mortgage rates and first-time jobless claims.
When you are buying a home, you may run into a number of hurdles to complete the purchase. One of the items that you may be asked to purchase is called private mortgage insurance, often shortened to PMI. This is a unique insurance policy that your lender, such as the credit union or bank, may ask you to buy in order to protect themselves. In this insurance policy, the bank protects themselves against losing money if you end up defaulting on your loan.
