The report on existing homes sales for the month of November is better than analysts were expecting. Sales jumped 0.7 percent to an annualized rate of 5.610 million. This is a nice increase from October’s pace of 5.570 million. Resales of single family homes declined by 0.4 percent but the pace is still the second highest on record. Condominium resales jumped 10.0 percent which is a surprising and strong turnaround for the sector. Overall sales of existing homes are 15.4 percent higher than the same time last year.
Home prices are rising at a slower pace than in previous months. For the month of October prices increased 0.4 percent according to the Federal Housing Finance Agency. The prior two months recorded increases of 0.6 and 0.7 percent. The strongest part of the report is that prices are 6.2 percent higher than the same time last year. This is the 3rd straight month of plus 6.0 percent values over last year’s numbers.
In a surprise reversal, applications for mortgage loans increased 3.0 percent for both purchases and refinances. It appears that consumers are accepting the reality that mortgage rates will likely remain where they are, or even increase further, so they want to take advantage of them now before the cost of financing likely increases further in 2017.
First time jobless claims unexpectedly increased last week up to 275,000. After the recent employment data has been sitting with claims hovering around the 250,000 mark, the latest increase seemed to catch most experts by surprise. Given that there appears to be more jobs available than people to fill them, it seems a little odd that layoffs may be increasing. Since there are no special circumstances reported that can be attributed to the increase, it raises a question if the next employment report due out on Friday January 8th will keep the trend of positive reports going?
Finishing out this week’s economic reports, the 3rd quarter GDP data lived up to expectations that it would show the economy continues to have strength. With an adjustment for inflation, the latest report showed an increase of 3.5 percent beating analyst’s expectations. This is the strongest report in the last two years and the trend of continued improvement is likely to continue well into the first quarter of 2017.
Expect the markets to remain quiet now through the remainder of the holiday season.
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