Existing Home Sales: Existing home sales were down 3.4% to a seasonally adjusted annual rate of 5.36 million in October. Year on year, sales are up only 3.9%. This is the lowest year-on-year rate since January. Single-family home sales are down 3.7% to 4.75 million. Condo sales are down 1.6% to 610,000. Lack of supply of existing homes in the market is bringing down sales numbers. Supply sits at 4.8 months. Six months’ supply is considered healthy. There are 100,000 less existing homes on the market than there were at this time last year. Prices also dropped in October, down 0.9% to put the median price of an existing home at $219,600. There was a sales decline of 8.7% in the West. The South also saw a 3.2% drop in sales, while the Northeast and Midwest didn’t change much.
GDP: Third-quarter GDP was revised up 0.6% to 2.1% last week. Higher inventories are the major cause of the revision. Inventories showed only a 0.8% drop in the third quarter vs. an initial estimate of a 1.4% decline. Meanwhile, consumer demand was revised down to a 2.7% from 3.0%. Net exports also suffered in the revision, down 0.2% compared to a minimal effect in the initial estimate. Residential investment added 0.2% to GDP, while nonresidential fixed investment chipped in 0.3%. Both of these readings didn’t change much in the revision. Personal consumption expenditures were revised down 0.2% to a gain of 3.0%. Part of this has to do with less spending on durable goods and lower energy prices.
S&P Case-Shiller HPI: Home prices were up 0.6% on a seasonally adjusted basis in September. This is up 0.2% month-to-month overall, and prices are up 5.5% on the year. None of the cities surveyed had declines. Miami was up 1.2%, while Tampa and Atlanta were up 1.0%. In the West, San Francisco also had a 1.2% gain, while Portland was at 1.0%. On an annual basis, San Francisco has gained 11.3%, and Denver is up 10.9%. On the other end of the spectrum are New York with 2.7% gains, Washington, DC at 2.2% and Chicago at 1.2%.
Consumer Confidence: Consumer confidence fell almost nine full points to 90.4 in November. This is the lowest reading since September of last year. Expectations are down more than 10 points to 78.6. Consumers think there will be fewer jobs available six months from now. The present situation component is down 6.5 points to 108.1. Here, 26.2% of Americans believe jobs are harder to get vs. 24.6% in October. However, only 19.9% think jobs are plentiful vs. 22.7% in October. The good news is there was a jump of 2.8% in the number of Americans planning to buy cars. This was somewhat offset by a 0.6% decline in the number of Americans planning to buy a house. Inflation expectations also fell 0.1% to 5.0%.
MBA Mortgage Applications: Mortgage applications were down 3.2% last week as purchase applications were down 1.0% and refinances fell 5.0%. The average rate on a 30-year-fixed mortgage was down four basis points to 4.18%.
Durable Goods Orders: It was a good month for durable goods in October, as new orders were up 3.0%. Much of the gain is attributable to transportation. While the motor vehicle orders were down 2.9% for the month, commercial aircraft orders were up 200%. Excluding transportation, orders were only up 0.5%. This number matched year-on-year gains for new orders. Machinery orders were up 1.6% and computer orders gained 5.5%. Meanwhile, communications equipment rose 1.8%. However, total shipments were down 1.0%. Shipments of core capital goods were also down, despite orders being up 1.3%.
Jobless Claims: Initial claims fell 12,000 to 260,000 last week. Meanwhile, the four-week average was unchanged at 271,000. Meanwhile, continuing claims were less positive. They were up 34,000 last week to 2.207 million. Meanwhile, the four-week average is up 15,000 to 2.182 million.
Personal Income and Outlays: There was a 0.4% rise in personal incomes, including a 0.6% rise in wages and salaries. Despite this, consumer spending rose only 0.1% in October. This was just enough to keep up with a matching increase in prices. Meanwhile, prices were unchanged in core categories and are up only 1.3% in those categories on the year. Meanwhile, prices have risen just 0.2% overall since this time last year.
FHFA House Price Index: Data from the Federal Housing Finance Agency showed that prices were up 0.8% in September and are up 6.1% on the year. It’s the strongest monthly gain since March 2013. Prices went up in all nine surveyed regions.
New Home Sales: New home sales had gains of 10.7% to 495,000 on a seasonally adjusted annual basis. It wasn’t quite enough to make up last month’s losses, and new home sales have gained 4.9% on the year. Supply in the market fell from 6.0 months in September to 5.5 months in October. Meanwhile, the median price for a new home was down 8.5% to 281,000. Sales gains were up more than 100% in the Northeast, while they were up 8.9% in the South, the nation’s biggest housing region.
Consumer Sentiment: Consumer sentiment fell 1.8 points from its midmonth reading to 91.3 in the final reading of November. Part of this might be attributable to the recent terrorist attacks in Paris. Expectations are down 2.7 points to 82.9. The current conditions component is down 0.5 points to 104.3. Inflation readings are at 2.7% over the next year and 2.6% over the next five years.
After a little bit of upward pressure the last few weeks, mortgage rates were in a holding pattern last week.
30-year fixed-rate mortgages (FRMs) averaged 3.95% with an average 0.7 point for the week ending November 25, 2015, down from last week when they averaged 3.97%. A year ago at this time, 30-year FRMs averaged 3.97%.
15-year FRMs this week averaged 3.18% with an average 0.6 point, unchanged from last week. A year ago at this time, 15-year FRM averaged 3.17%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.01% this week with an average 0.5 point, up from last week when they averaged 2.98%. A year ago, 5-year ARMs averaged 3.01%.
1-year Treasury-indexed ARMs averaged 2.59% this week with an average 0.3 point, down from 2.64% last week. At this time last year, 1-year ARMs averaged 2.44%.
Stock traders definitely checked out for the Thanksgiving weekend as Friday was the lowest trading volume day of the year and results were mixed.
The Dow Jones Industrial Average was down 14.90 points at the closing bell to finish at 17,798.49 for a weekly decline of 0.14%. Meanwhile, the S&P 500 was up 1.24 points to 2,090.11, gaining 0.04% on the week. Finally, the NASDAQ was up 11.38 points to 5,127.53, rising 0.44% since last Friday.
The Week Ahead
Monday, November 30
Pending Home Sales Index (10:00 a.m. ET) – The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it’s a leading indicator of existing home sales, not new home sales.
Tuesday, December 1
ISM Manufacturing Index (10:00 a.m.) – This index measures the general direction of manufacturing within the U.S. The qualitative survey of purchasing managers looks at production, new orders, order backlogs, inventories and supplier deliveries, among other factors.
Wednesday, December 2
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, December 3
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, December 4
Employment Situation (8:30 a.m. ET) – The employment situation report measures unemployment in the labor force as well as the sentiments of workers about the job market.
International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings.
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