In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales and unemployment insurance.
- New home sales made a slight gain in July. From one year ago, the gain is more impressive at 25 percent. However, current activity is still less than half of normal. Housing starts need to ramp up much faster in order to further elevate new home sales. Inventory of newly constructed homes continued to touch fresh lows with only 142,000 homes available for sale at the end of July, which is a 50-year low.
- The homebuilders may be constructing slightly smaller-sized homes. The median price of sold homes in July was $224,200, which is a decline of 2.5 percent from one year ago. The recent rise in lumber prices will no doubt push up price of new homes in later months.
- In separate news, the labor market just can’t seem to recover consistently and solidly: initial claims for unemployment insurance for the week ending August 18 registered at 372,000, up by 4 thousand from the previous week ‘s revised (upward) estimate. This is the third straight week that claims have moved up, which puts the 4-week moving average at 368,000 claims.
- According to the Department of Labor which compiles the data, the largest increases in initial claims for the week ending August 11 were in California (+7,941), Oregon (+755), Idaho (+527), and Connecticut (+306), while the largest decreases were in Michigan (-2,324), Pennsylvania (-1,879), Indiana (-1,485), Illinois (-1,223), and Massachusetts (-1,212).
- Despite the uneven labor market, jobs are still being added on net. The 4 million net new jobs in the past 3 years (after having lost 8 million during recession) is adding steadily more people to the pool of potential home buyers.