New Home Sales
New home sales jumped to a six-year high in December with sales of new single-family homes hitting an annual rate of 481,000, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. This marked an 11.6 percent gain over November’s revised rate of 431,000 and an 8.8 percent increase from December 2013’s estimate of 442,000.
Looking at price, the median sales price of new homes sold in December was $298,100; the average sales price was $377,800. In terms of inventory, the estimated number of new homes for sale at the end of December was 219,000, constituting a 5.5-month supply at the December’s sales rate.
Looking at year-end performance, an estimated 435,000 new homes were sold in 2014, which was 1.2 higher than 2013’s total of 429,000.
“On the whole, the combination of lower mortgage rates and solid labor market activity appear to have ignited a meaningful pick-up in sales activity,” Millan Mulraine, deputy head of U.S. research and strategy at TD Securities, wrote in a public statement.
Initial Jobless Claims
After a couple weeks of increases, initial jobless claims plummeted to a 15-year low. First-time claims for unemployment benefits filed by the newly unemployed during the week ending Jan. 24, plunged to 265,000, a decline of 43,000 claims from the preceding week’s revised level of 308,000, the Employment and Training Administration reported last week. This is the lowest level for initial jobless claims since April 15, 2000 when it was 259,000.
The four-week moving average, considered a more stable measure of lay-offs, dropped to 298,500, a decline of 8,250 claims from the prior week’s revised average of 306,750.
“The labor market’s in good shape going into 2015 and looks like it will be in good shape for the rest of the year,” RBS Securities Inc. economist Guy Berger told Bloomberg.
With good news in housing and employment, consumer opinions on the economy were looking more optimistic. The Conference Board’s Consumer Confidence Index shot up to 102.9 January from December’s already encouraging 93.1 (a baseline of 100 was set in1985).
“Consumer confidence rose sharply in January, and is now at its highest level since August 2007 (Index, 105.6),” said Lynn Franco, director of economic indicators for The Conference Board. “A more positive assessment of current business and labor market conditions contributed to the improvement in consumers’ view of the present situation.”
The Present Situation Index, which describes how consumers feel about current economic conditions grew to 112.6 in January from 99.9 December. The Expectations Index, which describes how consumers feel the economy will fare in the near future, increased to 96.4 from 88.5.
This week we can expect:
- Monday — Personal incomes and spending for December from the Bureau of Economic Analysis; construction spending for December from the Census Bureau.
- Tuesday — December factory orders from the census Bureau; car and truck sales for January from the auto manufacturers.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; the December balance of trade from the Census Bureau; preliminary fourth quarter labor productivity scores from the Bureau of Labor Statistics.
- Friday — December consumer credit from the Federal Reserve; January unemployment rate, payrolls, earnings and workweek from the Bureau of Labor Statistics.