Economic Update, July 2, 2012
Provided Courtesy of Marie Richarz, Prospect Mortgage
New home sales rose 7.6% in May to a seasonally adjusted annual rate of 369,000 units, the highest level since April 2010. On a year-over-year basis, new home sales are up 19.8% compared with May 2011. At the current sales pace, there’s a 4.7-month supply of new homes on the market, the lowest level since 2005.
The Standard & Poor’s/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 1.3% in April, following a flat reading in March. On a year-over-year basis, prices fell 1.9% compared with April 2011.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending June 22 fell 7.1%. Refinancing applications decreased 8%. Purchase volume fell 1%.
Orders for durable goods — items expected to last three or more years — rose $2.3 billion or 1.1% to $217.2 billion in May. This increase follows an unrevised 0.2% decrease in April. Excluding volatile transportation-related goods, May orders posted a monthly increase of 0.4%.
Pending home sales, a forward-looking indicator based on signed contracts, rose 5.9% in May after a 5.5% decrease in April. On a year-over-year basis, pending home sales are up 13.3% compared with May 2011.
The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an unrevised annual rate of 1.9% in the first quarter of 2012. This follows a 3% pace of growth in the fourth quarter of 2011.
Initial claims for unemployment benefits for the week ending June 23 fell by 6,000 to 386,000 from an upwardly revised 392,000 the prior week. Continuing claims for the week ending June 16 fell 15,000 to 3.296 million.
Upcoming on the economic calendar are reports on construction spending on July 2 and factory orders on July 3.