The Housing Chronicles Blog

Thursday, July 19, 2018

Initial unemployment claims fall to lowest level since December 1969

In the week ending July 14, initial unemployment claims were 207,000, a decrease of 8,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 2,750 from the previous week's revised average.

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Mortgage applications fall 2.5 percent as purchase loans slip

The Market Composite Index decreased 2.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 5.0 percent but refinances rising 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.77 percent from 4.76 percent.

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June Leading Economic Index rose 0.5 percent after no change in May

The U.S. LEI increased in June by 0.5 percent to 109.8 after being flat in May, pointing to continuing solid growth in the U.S. economy. The widespread growth in leading indicators, with the exception of housing permits which declined once again, does not suggest any considerable growth slowdown in the short-term.

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Wednesday, July 18, 2018

June industrial production rebounded 0.6 from May, up 3.8 percent year-on-year

Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase.  At 107.7 percent of its 2012 average, total industrial production was 3.8 percent higher in June than it was a year earlier.

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June building permits dip for third straight month, down 3.0 percent year-on-year

Privately-owned housing units authorized by building permits in June dipped for the third month to a seasonally adjusted annual rate of 1,273,000, which is the lowest rate since September 2017. This is also 2.2 percent below the revised May rate of 1,301,000 and is 3.0 percent below the June 2017 rate of 1,312,000.

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June housing starts dip to lowest level since September 2017, down 4.2 percent year-on-year

Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,173,000, dipping to the lowest rate since September 2017. This is 12.3 also below the revised May estimate of 1,337,000 and is 4.2 percent below the June 2017 rate of 1,225,000.

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June new home mortgage applications down 12 percent from May and 8.8 percent year-on-year

June mortgage applications for new home purchases decreased 12 percent since May and were down 8.8 percent year-on-year, but are not seasonally adjusted.  For the first six months of 2018, however, new home applications rose 2.5 percent year-on-year.

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Beige book: Expansion continuing, but tariffs impacting prices and supplies

Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District where growth was described as slight. Manufacturers in all Districts expressed concern about tariffs and in many Districts reported higher prices and supply disruptions that they attributed to the new trade policies.

All Districts reported that labor markets were tight and many said that the inability to find workers constrained growth. Consumer spending was up in all Districts with particular strength in Dallas and Richmond. Contacts reported higher input prices and shrinking margins. Six Districts specifically mentioned trucking capacity as an issue and attributed it to a shortage of commercial drivers. Contacts in several Districts reported slow growth in existing home sales but were not overly concerned about rising interest rates. Commercial real estate was largely unchanged.

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Tuesday, July 17, 2018

June industrial production rebounded 0.6 from May, up 3.8 percent year-on-year


Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase.

At 107.7 percent of its 2012 average, total industrial production was 3.8 percent higher in June than it was a year earlier. Capacity utilization for the industrial sector increased 0.3 percentage point in June to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972–2017) average.


Builder confidence unchanged at 68 in July survey

Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 68 reading in July on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI index measuring current sales conditions remained unchanged at 74. Meanwhile, the component gauging expectations in the next six months dropped two points to 73 and the metric charting buyer traffic rose two points to 52.

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Builder confidence unchanged at 68 in July survey


Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 68 reading in July on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

The HMI index measuring current sales conditions remained unchanged at 74. Meanwhile, the component gauging expectations in the next six months dropped two points to 73 and the metric charting buyer traffic rose two points to 52.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.


Monday, July 16, 2018

July Empire State Manufacturing Survey index dips two points to 22.6

The headline general business conditions index edged down by over two points to 22.6—still a high level, suggesting a continuation of robust growth. Looking ahead, firms were slightly less optimistic about the six-month outlook than they were last month.

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June retail sales rose 0.5 percent from May and 6.6 percent year-on-year

Retail sales increased 0.5 percent in June, for the largest gain since September 2017, and were up 6.6 percent year-on-year. Total sales for the April 2018 through June 2018 period were up 5.9 percent from the same period a year ago.

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Friday, July 13, 2018

Consumer sentiment slips in mid-July read but still at high level

Consumer sentiment slipped in early July but remained nearly equal to the average in the prior twelve months (97.7) and since the start of 2017 (97.4).  So far, the strength in jobs and incomes has overcome higher inflation and interest rates. The darkening cloud on the horizon, however, is due to rising concerns about the potential negative impact of tariffs on the domestic economy. While consumers may not understand the intricacies of trade theory, they have substantial experience making decisions about the timing of discretionary purchases based on prospective trends in prices.

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Thursday, July 12, 2018

Initial unemployment dip by 18,000 in weekly report

In the week ending July 7, initial unemployment claims were 214,000, a decrease of 18,000 from the previous week's revised level. The 4-week moving average was 223,000, a decrease of 1,750 from the previous week's revised average.

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