Last week’s economic reports included readings on home prices, pending home sales and construction spending. Weekly reports on mortgage rates and new jobless claims were released along with labor-sector readings on Non-Farm Payrolls, ADP employment and National Unemployment.
Case–Shiller: Three Western Cities Hold Top Three Places for Home Price Growth
According to Case-Shiller’s June edition of its 20-City Home Price Index, the top three spots were again held by Seattle, Washington, Portland Oregon and Dallas, Texas. Seattle home prices outstripped Portland, Oregon with a reading of 13.40 percent home price growth on a seasonally-adjusted annual basis. Portland, Oregon home prices grew by a seasonally-adjusted year-over-year rate of 8.20 percent while Dallas, Texas held third place with its year-over-year reading of 7.70 percent growth.
David Blitzer, CEO and Managing Director of S&P’s Index Committee, said that he sees no indications that home prices will cool anytime soon. Strong labor markets and economic growth are encouraging home buyers while low inventories of homes for sale coupled with high demand continued to fuel home price growth.
Construction spending dipped in July by -0.60 percent as compared to expected growth of + 0.60 percent and June’s reading of 1.30 percent growth in spending. Real estate pros said that building more homes is the only way to ease demand for homes, but builders cited labor and lot shortages along with rising materials costs as obstacles to building more homes faster.
Mortgage Rates Fall, Weekly Jobless Claims Rise
Mortgage rates remain relatively low; Freddie Mac reported average mortgage rates for a 30-year fixed rate mortgage fell four basis points to 3.82 percent; interest rates for a 15-year fixed rate mortgage were four basis points lower at 3.12 percent and the average rate for a 5/1 adjustable rate mortgage was three basis points lower at 3.14 percent. Discount points averaged 0.50 percent for all three mortgage types.
First-time jobless claims rose by 1000 claims to 236,000. Analysts had expected no change from the prior week’s reading of 235,000 new jobless claims.
ADP payrolls rose to 237,000 new jobs reported for August as compared to 201,000 new private-sector jobs reported in July. The Bureau of Labor Statistics reported 156,000 new public and private sector jobs in August; Based on the ADP report and the expected reading of 170,000 new public and private-sector jobs, revision of the Non-Farm Payrolls report appears likely.
The National Unemployment rate ticked up from July’s reading of 4.30 percent to 4.40 percent in August. Low readings for unemployment indicate that layoffs are not significantly contributing to unemployment.
What‘s Ahead
No financial reports will be issued Monday in observance of the Labor Day Holiday. The Federal Reserve’s Beige Book report will be released along with reports on productivity and weekly readings on mortgage rates and new jobless claims.
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According to the Case-Shiller National Home Price Index for June, Seattle, Washington continued to lead home price growth for the tenth consecutive month with a June reading of 13.40 percent growth year-over-year. Portland Oregon held second place for home price growth in the 20-City Home Price Index in June but trailed Seattle by 5.20 percent with 8.20 percent year-over-year home price growth. Dallas Texas held third place with a year-over-year home price growth rate of 7.70 percent. The 20-City Home Price Index increased by 5.70 percent year-over-year and was unchanged from May’s reading.
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Last week’s economic news included readings on sales of new and previously-owned homes, Weekly readings on mortgage rates and new jobless claims were also released, along with coverage of Fed Chair Janet Yellen’s remarks at a conference in Jackson Hole, Wyoming.