Existing-home sales lost steam in July due to ongoing inventory issues, falling by 3.2 percent down to an annual rate of 5.39 million. What will they do in August? The industry will find out on Thursday, September 22, at 10 a.m. EST when the National Association of Realtors releases it latest report.
The existing-home sales report covering July was a stark contrast to the new home sales report from HUD and the Census Bureau for the same month, which showed that the pace of sales of newly constructed homes skyrocketed by 12.4 percent over-the-month and 31 percent over-the-year.
Ralph McLaughlin, chief economist at Trulia, said that the comparison between July’s “stellar new home sales numbers with (July’s) existing-home sales tells an important tale of two housing markets.”
“The severely restrained inventory of existing homes has spurred new construction and new home sales (in July),” said Stephen Melman, Director of Economic Services with NAHB. “Builder sentiment remains cautiously optimistic, brightening prospects for new single-family sales in 2016.”
FOMC Announcement, Wednesday, September 21, 2 p.m. EST
The Federal Open Market Committee (FOMC), the policymaking arm of the Federal Reserve, will meet this week for the sixth time this year to determine if the economy has improved enough to raise this federal funds target rate from its current level of 0.25 to 0.50 percent.
In August, speculation was widespread that the Fed would raise rates in September for the first time since December’s historic liftoff. The Fed has gone five meetings since then without a rate hike.
August’s jobs report from the Bureau of Labor Statistics (151,000 jobs added for the month) released in early September cooled the speculation of a September rate hike, however. Speeches from Fed officials who vote on monetary policy, in particular a recent one from Fed Governor Lael Brainard, cooled that speculation even further.
Analysts doubt that the Fed raising the federal funds target rate will have an impact on mortgage rates for the near term. In the months following last December’s rate hike, mortgage rates fell to near record lows; the average 30-year FRM just increased back up to 3.50 percent last week for the first time since June.
The FOMC has two more policymaking meetings this year (November 1-2 and December 13-14), and some analysts think that a December rate hike is more likely than one in September. The FOMC will make its announcement as to whether or not rates will increase on Wednesday, September 21, at 2 p.m. EST.
This week’s schedule
Monday, September 19
NAHB Housing Market Index for September 2016, 10 a.m. EST
Tuesday, September 20
Federal Open Market Committee (FOMC) Meeting begins
Wednesday, September 21
FOMC Meeting Announcement, 2 p.m. EST
Thursday, September 22
FHFA House Price Index for July 2016, 9 a.m. EST
NAR Existing-Home Sales for August 2016, 10 a.m. EST