|For the Week Ending August 3, 2018|
The economy added 157,000 jobs in July, the Labor Department reported today, a sharp downturn from 248,000 in June.
Average hourly private-sector earnings were up 2.7 percent over the previous year, unchanged from June. The unemployment rate was 3.9 percent, down from 4 percent in June.
Analysts surveyed by Bloomberg had predicted the creation of 190,000 jobs.
This week investors have been struggling to latch on to any news, positive or negative, to make significant investment decisions. The biggest pressure on the market is President Trump’s desire to increase the tariffs on Chinese goods by another 200 billion dollars. Although most investors and experts don’t believe this will happen, the thought of it is certainly raising eyebrows.
Pending Home Sales:
There is a mixed message relating to the latest pending home sales data. For the month of June sales rose 0.9% according to the National Association of Realtors®. As much as pending sales are higher, they still trail last year’s numbers for the same time-period by 2.5%.
Demand for homes continues to far outweigh available homes for sale, essentially strangling the market. Inventory continues to shrink, and the expectation is that sales in the coming months will decline. The media keeps reporting that the housing market appears to be slowing, but they are creating the illusion that demand is decreasing. Reality is that nothing could be further from the truth.
Demand remains very strong. The challenge is that existing homeowners are just not selling. There is hope that once summer finishes, many of the homeowners who have been sitting on the fence about selling, will pull the trigger and begin increasing available inventory.
Case-Shiller Home Price Index:
Home prices continue to remain strong, even though the rate of increase is slowing. Demand remains quite robust, it is just that prices have risen so fast, that some buyers are either getting priced out of the market, or simply taking a breather from purchasing due to competition for offer acceptance.
The latest data that runs through May, shows prices rose 0.4% from the prior month. Overall prices are 6.5% higher than the same time last year. Home prices continue to rise much faster than the paces of inflation and wage growth. The three cities with double digit price appreciation, to no surprise, were Las Vegas, San Francisco, and Seattle. Even New York, which had been showing prices declining in previous months, were flat in May.
Next week’s potential market moving reports are:
• Monday August 6th – Survey of Consumer Expectations
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.
Please enjoy this quick update on what happened this week in the housing and financial markets.
|The Fed elected to leave policy rates unchanged at this month’s meeting, as was expected. Markets have already priced in 2 more rate hikes this year though.|
|Consumer spending increased solidly in June, helping drive the economy. Inflation also rose moderately, which could pressure rates higher in the future.|
|Although the labor market continues to show strength, the construction industry is struggling with labor shortages. Young job seekers just don’t seem interested.|
|Home prices were up 6.4% for the year in May, supported by low rates and tight inventory. The pace of price increases is showing signs of slowing.|
|Pending home sales were down in June from the previous year as inventory continues to be an issue. However, sales were up 0.9% compared to May.|
|Construction spending recorded its biggest drop in more than a year in June. Homebuilding has been slowing due to rising material costs and labor shortages.|
Anyone hiring? I had to quit my job as a can crusher… it was just soda pressing.
Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
American Family Funding
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28368 Constellation Road
Santa Clarita, CA
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