Eye on the Economy

15
Eye on the Economy New Home Sales Disappoint in June August 6, 2014 eyeonhousing.org

description

A biweekly review of the housing economy.

Transcript of Eye on the Economy

Page 1: Eye on the Economy

Eye on the EconomyNew Home Sales Disappoint in June

August 6, 2014

eyeonhousing.org

Page 2: Eye on the Economy

Rates on New Home Loans2

• Average effective mortgage rate for new home sales rose

• Current effective rate for new homes is slightly higher than the average for existing homes

• Read more here

Page 3: Eye on the Economy

New Home Sales3

• Market share of cash sales for new homes increased

• Higher than 2002-2003 average

• Market share of FHA-backed new home sales declined

• Read more here

Page 4: Eye on the Economy

Construction Spending4

• Residential construction spending up year-over-year

• Dollar volume pace of home building and remodeling down for last two months

• Improvement spending is down negligibly year-over-year

• Read more here

Page 5: Eye on the Economy

Housing Prices5

• House price growth remains above rate of inflation

• S&P/Case-Shiller 20-City Composite index eased to 9.3% in May

• FHFA Purchase-Only house price index increased 5.6%

• Read more here

Page 6: Eye on the Economy

Housing Prices Cont. 6

• 18 metro areas exhibited slower rates of growth

• 49 economist panel: Median forecast in the FHFA index for July 2014 was 4.7%

• Read more here

Page 7: Eye on the Economy

Pending Home Sales Index7

• PHSI fell 1.1% for the month

• Ends three month growth streak

• June was down 7.3% year-over-year

• Read more here

Page 8: Eye on the Economy

Existing Home Sales8

• Existing home sales had a 2.6% monthly increase in June

• Existing sales passed the 5 million mark

• First time since October 2013

• Read more here

Page 9: Eye on the Economy

Remodelers’ Confidence9

• Remodeling Market Index rose three points in Q2 of 2014

• Two out of three index components improved

• Indicators of future activity improved in Q2 of 2014

• Read more here

Page 10: Eye on the Economy

Homeownership Rate10

• Housing demand from newly formed households favors rental-markets over for-sale

• Homeownership rate fell to 64.8%

• Read more here

Page 11: Eye on the Economy

The Employment Situation for July11

• Payroll employment increased by 209,000 for the month

• Unemployment rose 0.1%

• Due to an addition of 329,000 into the labor force

• Read more here

Page 12: Eye on the Economy

GDP & FOMC12

• GDP Growth was up 4%

• Q2 experienced growth for exports and inventory investment

• NAHB is forecasting 1.7% overall GDP growth for the year

• Read more here

Page 13: Eye on the Economy

GDP & FOMC13

• Federal Reserve monetary policy committee agreed that Q1 GDP decline was due to transitory factors

• Indicated willingness to keep federal funds rate at the current low level

• Winding down asset purchase program

• Read more here

Page 14: Eye on the Economy

Affordability Pyramid14

• For a $1,000 increase in median new home price, more than 206,000 households would be priced our of the new home market

• 87 million households can afford a home price higher than $100k

• 22.8 million can afford a new home priced at $175k

• Read more here

Page 15: Eye on the Economy

Apartment Buildings Benefit from Sustainability

15

• Analysis of the relationship between multifamily housing and mortgage default for apartment owners

• Less likely if:

• Within a mile of open space

• In a neighborhood with significant retail presence

• Accessible to transit

• Meets certain affordability thresholds

• Read more here