“There’s something happening here, and what it is ain’t exactly clear.” (Buffalo Springfield) Sales of existing homes fell for the second straight month in May, with low inventory being a clear reason why.

Existing Home SalesMay existing home sales fell 0.4 percent from April to an annual rate of 5.43 million units, the National Association of REALTORS® reported. From May 2017 to May 2018, existing home sales were down 3 percent. While sales rose in the Northeast in May, they fell in the Midwest, West and South. Inventory of homes for sale on the market remains low with a 4.1-month supply, below the 6 months seen as normal.

NAR Chief Economist Lawrence Yun said, “Inventory coming onto the market during this spring’s buying season … was not even close enough to satisfy demand.”

The latest housing starts report had some good news for would-be buyers struggling with limited inventory, as the Commerce Department reported that new home construction surged in May. Housing starts rose 5 percent from April to an annual rate of 1.350 million units, which is also a 20.3 percent increase from May 2017.

Single-family starts, which account for the largest share of the housing market, rose 3.9 percent from April to May and were up 18.3 percent annually. Multi-family dwellings of five or more units rose 11.3 percent monthly and jumped 27.4 percent annually.

However, future new construction could ease a bit as building permits fell 4.6 percent monthly after declining in April.

Stocks struggled in the latest week due in part to escalating trade-war tensions while mortgage bonds leveled off after a few weeks of high volatility. Home loan rates remain near historically low levels.

The week’s broad array of economic data has the potential to move the markets, as do any geopolitical or trade-war tensions.

  • In the housing sector, look for New Home Sales Monday, the S&P/Case-Shiller Home Price Index Tuesday and Pending Home Sales Wednesday.
  • Consumer Confidence will be released on Tuesday. The Consumer Sentiment Index follows on Friday.
  • Manufacturing news comes via Durable Goods Orders data on Wednesday and the Chicago PMI on Friday.
  • Thursday brings the final reading on first quarter 2018 Gross Domestic Product along with weekly Initial Jobless Claims.
  • Look for news on inflation Friday with Personal Consumption Expenditures, along with Personal Income and Personal Spending data.

If you or someone you know has any questions about home loan rates, please give me a call. I’d be happy to help.

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