6/17: EconUpdate by P. Duffy
EconUpdate by P. Duffy
Purchase loan applications rebound 2 percent from previous week, but down 17 percent year-on-year
What does this mean? Home demand remains strong despite falling from the more frenzied rebound of last year.
The Market Composite Index for mortgage applications increased 4.2 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 2 percent (but down 17 percent year-on-year) and refinance activity rising 6 percent (but down 22 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.11 percent from 3.15 percent.
June builder confidence falls back to lowest level since August 2020, but demand remains high
What does this mean? Rising material prices, supply chain shortages and low appraisals impacting construction loans combined to lower confidence.
Rising material prices and supply chain shortages resulted in builder confidence dipping two points to 81 in June, or its lowest level since August 2020. Despite the monthly decline, the reading above 80 is still a signal of strong demand in a housing market lacking inventory. The HMI index gauging current sales conditions fell two points to 86, the gauge charting sales expectations in the next six months posted a two-point decline to 79 and the component measuring traffic of prospective buyers dropped two points to 71.
Housing starts rise 3.6 percent in May and 50.3 percent year-on-year
What does this mean? Builders are doing all they can to increase supply despite ongoing challenges with material prices and availability.
Privately?owned housing starts in May were at a seasonally adjusted annual rate of 1,572,000. This is 3.6 percent above the revised April estimate of 1,517,000 and is 50.3 percent above the May 2020 rate of 1,046,000. Single?family housing starts in May were at a rate of 1,098,000; this is 4.2 percent above the revised April figure of 1,054,000.
https://www.census.gov/construction/nrc/pdf/newresconst.pdf
Building permits dip 3.0 percent in May, but up 34.9 percent year-on-year
What does this mean? Despite the dip from May, since the annual rate of permits is higher than starts, look for supply bottlenecks to ease in the months ahead.
Privately?owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,681,000. This is 3.0 percent below the revised April rate of 1,733,000, but is 34.9 percent above the May 2020 rate of 1,246,000. Single?family authorizations in May were at a rate of 1,130,000; this is 1.6 percent below the revised April figure of 1,148,000.
