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Home Sales Slip

Economic Observer: Up-to-date information on the latest financial news

Overview: Following last Wednesday’s Federal Reserve meeting, there has been little major economic news, and it was a quiet week for mortgage markets. Rates ended slightly higher but remain near the lowest levels since early 2023.


 

In the housing sector, August sales of existing homes, which account for roughly 85% of the total market, fell a little from July and were 4% lower than a year ago. The median existing-home price of $416,700 was up 3% from last year at this time to a new record for the month of August. Inventories remain at historically low levels, standing at just a 4.2-month supply nationally, which is far below the 6-month supply typical in a balanced market. The recent trend is favorable, however, as inventories were 23% higher than a year ago.


The latest monthly results were similar for the segment containing newly constructed homes. In August, new-home sales, which account for the remaining 15% of the market, fell 5% from July. That said, last month’s new-home sales had surged to the highest level since February 2022, so a modest decline was not surprising, and sales were still 10% higher than a year ago. The median new-home price of $420,600 was 5% lower than a year ago. While existing-home sales measure actual closings during the month, new-home sales are based on contracts signed, making them a leading indicator of future housing market activity.


The monthly report on consumer confidence published by the Conference Board has been receiving more attention lately, since it may provide hints about upcoming changes in spending habits. The most recent reading revealed the largest monthly decline since August 2021, falling far below the consensus forecast. Price increases topped the list of economic concerns. In addition, consumers had a significantly worse outlook for labor market conditions and future income, particularly those earning less than $50,000.

 

Existing-Home Sales (millions)

Chart of Retail Sales percentage change from December 2023 to August 2024, showing a range from -1% in January to +1% in July.

 

Week Ahead


Sept. 26

Fed Chair Jerome Powell scheduled to speak


Sept. 27

Personal Income and Outlays

Personal Consumption Expenditures (PCE) Price Index


Oct. 1

Institute for Supply Management (ISM) Manufacturing Index


Oct. 3

ISM Services Index


Oct. 4

Employment Report

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