What I Saw Last Week

U.S. Existing Home Sales rose 3.0% in February to a seasonally adjusted annual rate of 5.54M units.  I had forecast a rise to 5.42M.  Sales are 1.1% higher than seen a year ago.

EHS

The median existing home price for all housing types rose 5.9% to $241,700, the 72nd straight month of year-over-year gains. The median existing single-family home price came in at $243,400, up 5.9% from a year ago.

The inventory of homes for sale at the end of February (1.59 million units) increased 4.6%, but is 8.1% lower than the same period a year ago. Of note is that the inventory of existing homes for sale has fallen year-over-year for 33 consecutive months.

The takeaway from this report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory — and the high prices of available inventory — is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are going to feel added affordability pressures from rising mortgage rates.

U.S. New Home Sales declined 0.6% month-over-month in February to a seasonally adjusted annual rate of 618,000 – I had forecast 620,000 – from an upwardly revised 622,000 (from 593,000) in January.

NHS

The median sales price rose 9.7% year-over-year to $326,800 while the average sales price increased 15.3% to $376,700.

The takeaway from the report is that, although new home sales declined for the third consecutive month, they are up 0.5% year-over-year. That said, new home starts are still running well below historic levels.

What to Watch for This Week

Case Shiller Index data for January is released on Tuesday and I expect that the 20-City index will have risen by 6.3% year-over-year, matching the number seen in December.

Consumer Confidence in February was measured at 130.8 (its highest level since 2000).  The March data should show a slight pull back to 129.5.

The third and final estimate for U.S. GDP in Q4-2017 isn’t expected to move much from the previously announced growth rate of 2.5%. Look for the economy to have expanded by 2.6%.

The NAR Pending Home Sales Index for February should show a turnaround from the 4.7% contraction seen in January.  My call is for it to have risen from 104.6 to 107.2.

Income & Spending rose by 0.4% and 0.2% respectively in February.  I expect that the March figures will show exactly the same rate of growth.

The final Consumer Sentiment number for March is unlikely to have changed from the initial figure of 102.0.

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