MetroIntelligence Economic Update by P. DUFFY
Existing home sales drop 0.7 percent in August and 15.3 percent year-on-year
Existing-home sales retreated 0.7% in August to a seasonally adjusted annual rate of 4.04 million. Sales dropped 15.3% from one year ago. The median existing-home sales price climbed 3.9% from one year ago to $407,100 – the third consecutive month the median sales price surpassed $400,000. The inventory of unsold existing homes dipped 0.9% from the prior month to 1.1 million at the end of August, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
Building permits rise 6.9 percent in August but down 2.7 percent year-on-year
Privately?owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,543,000, up 6.9% from July but down 2.7% year-on-year. Single?family authorizations in August were at a rate of 949,000; up 2.0% from July and 7.2% year-on-year. Authorizations of units in buildings with five units or more were at a rate of 535,000 in August, up 14.8% from July but down 17.7% year-on-year.
Housing starts down 11.3 percent in August and 14.8 percent year-on-year
Privately?owned housing starts in August were at a seasonally adjusted annual rate of 1,283,000. This is down 11.3% from July and 14.8% year-on-year. Single?family housing starts in August were at a rate of 941,000; this is down 4.3% from July but up 2.4% year-on-year. The August rate for units in buildings with five units or more was 334,000, down 26.3% from July and 41.0% year-on-year.
Fed holds rates steady for now, but hints at another hike in the near future
As widely expected, the Fed opted to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent, but hinted at another rate hike in the near future. The Fed also released new economic projections in which GDP growth through 2024 is higher than expected back in June and the unemployment rate through 2024 remains lower than expected in June. The Fed’s revised projections for overall inflation through 2023 are also slightly higher than predicted in June, although the ‘core’ inflation rate minus energy and food costs is lower than June’s estimates.