It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines…
New Home Sales
On Friday, the Commerce Department reported that new home sales improved 2.9% to an annual pace of 610,000 in May. This topped analysts’ expectations of 600,000. New home sales for April were also revised sharply higher from 569,000 to 593,000. In May, the median price of a new home jumped to $345,800, a 16.8% increase over a year ago. This is partly because the supply of new homes remains very tight at just 268,000 units. At the current sales pace, there’s just enough inventory for 5.3 months.
Existing Home Sales
On Wednesday, the National Association of Realtors announced that existing home sales rose 1.1% to an annual pace of 5.62 million in May. This was better than economists’ consensus expectation of a 5.51 million annual pace. The average home has now been on the market for only 27 days. Also, the inventory of homes for sale has declined by 8.4% to 1.96 million homes. Median home prices rose to $252,800; prices have risen 5.8% in the past 12 months. The fact that housing inventory is at just a 4.2-month supply may limit overall home sales in the coming months.
Index of Leading Economic Indicators
On Thursday, the Conference Board announced that the leading economic index rose 0.3% in May, in line with analysts’ expectations. This represented an uptick from April, when the index climbed 0.2%. Of the ten economic indicators tracked by the index, eight showed growth, including the interest rate spread, consumer expectations for business and stock prices. Meanwhile, the average workweek in manufacturing showed no signs of improvement, while housing permits declined. All-in-all, the latest results suggest that the U.S. economy remains on track for about 2.0% annual growth.
That’s all I have for you this week; I’ll be in touch again next week with the latest ratings updates out of Portfolio Grader.
Have a great weekend,