Housing/Real Estate Market
May home sales perk up as median price reaches another high: While the year-to-year percent growth was the smallest in 13 months, the California existing single-family home sales rose above the 400,000 benchmark for the first time since July 2018 and reached the highest level in 11 months. Similarly, the May median home price surpassed its prior price peak established the previous month by 1.4%, and it set a new all-time high of $611,190.
Existing-home sales nationwide rise 2.5% in May: Despite sales being down 1.1% from a year ago, total existing-home sales jumped 2.5% from April, marking the first increase in two months. Meanwhile the median home price was up 4.8% marking its 87th straight month of year-over-year gains.
Housing starts slip but permits rise pointing to stronger short-term growth ahead: Construction of new homes underperformed last month’s pace by 0.9% and 4.7% from a year ago. Permits on the other hand grew 0.3% from the month prior and were just shy of May 2018’s level by 0.5%.
The U.S. home builder confidence fell two points to 64 in June: According to NAHB’s Housing Market Index (HMI), home builder sentiment fell back in June. This means the YTD average for 2019 is 63, which is down from 67 in 2018. While the index remains well over 50, signaling improvement and a positive builder confidence, builders have started far fewer homes than in previous points in history.
California labor markets lead the pack: Although job growth remains relatively low for the cycle at just 1.6% on an annual basis, California enjoyed a healthy 19,400 job increase in May. Unemployment ticked down to 4.2% and although growth is expected to be slower in 2019, labor markets are still in good shape from a housing demand standpoint.
U.S. leading indicators flat in May, point to slower economy: The leading economic index was unchanged after three straight increases. While the U.S. economy continues to expand after 10 years since the last recession, signs of weakness have emerged and are suggesting slower growth in the months ahead as it enters its 11th year of continuous growth.
U.S. jobless claims fall with not signs of layoffs on the rise: The number of people that applied for unemployment benefits in mid-June fell to a one-month low and clung near the lowest level in decades. This signals a labor market that remains robust despite a slowdown in hiring and softer economic growth.
Real Estate Finance
Mortgage rates stabilize: After consistent declines, the 30-year fixed-rate mortgage leveled off and averaged 3.84% last week from 3.82% the week prior. Rates are nearly ¾ of a point lower than they were the same time last year and continues to provide a window of opportunity for would-be buyers to enter the market in time for the Summer selling season.
Mortgage applications decrease 3.4% from one week earlier: The overall measure of mortgage loan application volume decreased, including the refinance applications. According to MBA, after a six-week streak, the slight increase in the 30-year FRM from last week might have led to a pullback in overall mortgage activity.