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Retail sales rose 17.7% in May, well above the 8% forecast. Although still below prior levels, it was the biggest one-month jump of all time.

Fed Chair Jerome Powell warned of 'significant uncertainty' about the economic recovery in his semi-annual testimony before Congress, echoing his tone from last week.

A second wave of layoffs and tepid demand saw initial jobless claims come in at 1.508 million last week. However, claims were lower for the 11th period in a row.

 

 

A strong rebound in permits suggests the new home market is starting to emerge from the covid crisis. Housing starts rose in May, though less than expected.

Home builder sentiment posted its biggest monthly surge ever in June, helped by a faster-than-expected turnaround in homebuyer demand.

Purchase mortgage applications hit an 11-year high last week as rates dropped. Apps were up 4% over the previous week and were 21% higher than a year ago.

 

 


 

Consumer prices fell for the 3rd straight month in May. Underlying inflation was weak, as demand remained subdued. Low inflation typically helps keep rates low.

At their June meeting, the Fed renewed their commitment to purchasing mortgage bonds. Their purchases increase demand and support low rates.

Initial jobless claims last week came in at 1.542 million, continuing the trend of weekly improvement. The continued claims number also fell to 20.929 million, from 21.268 million.

   

The pandemic seems to have made buyers even more eager to purchase a home. A recent survey shows first-time buyers and millennials may be the most motivated.

Housing experts predict the pandemic may make consumers more dependent on agents moving forward. Agents are increasingly employing technology to digitize sales.

The pandemic will likely speed employers' adoption of remote work. As consumers untether from offices, they will have more flexibility to move away from expensive cities.

 

 


 

Manufacturing activity rebounded from an 11-yr low in May, the strongest sign yet that the worst of the economic downturn is behind us as businesses reopen.

Construction spending rose year over year in April, despite a dip due to the recent lockdowns. Residential spending was 6.2% higher than in 2019.

Initial jobless claims dropped below 2 million for the first time since mid-March, continuing a pattern of weekly declines.

 

According to a May survey, 52% of home builders are using incentives to bolster sales. Incentives include paying closing costs/fees, offering free or reduced-cost upgrades, and discounting prices.

Home prices in April saw their biggest gain in 2 years, up 5.4% annually and 4.5% from March. Inventory of entry level homes fell 25% in April from a year earlier.

A recent survey of 1,700 homebuyers suggests they are acclimating to the tight inventory. 41% say they'd be willing to go over budget by an average of $25,000 for the home they want.

 


 

 

Consumer confidence nudged up in May, suggesting a positive turn for the pandemic-driven economic slump as the country starts to reopen.

U.S. retail traffic jumped over Memorial Day weekend, according to cell phone data. Unacast reported national traffic to retail sites was about 25% of 2019 numbers.

Last week's continuing unemployment claims fell for the first time during the pandemic. Initial claims came in at 2.12 million, for a 4-week total of more than 40 million.

 

Home prices continued to grow in March. The FHFA's House Price Index showed 1st quarter gains over 2019, and Case-Shiller posted larger annual increases in March than in February.

Purchase mortgage apps rose for the 6th straight week, jumping 9 percent over the previous week and surging 54 percent over early April's activity.

New home sales increased in April, defying expectations of a huge drop. Builders have been reporting stronger demand, and builder sentiment rose in May.

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

Mortgage rates continue to hit record lows, and mortgage applications point to a remarkable recovery in homebuying. Purchase apps rose 6% last week, only 1.5% lower than a year ago.

More than 8% of U.S. mortgages are now in forbearance, equating to roughly 4.1 million borrowers. However, the number of people needing such help is slowing.

Initial jobless claims remained high last week as backlogs are being cleared, but they continued their week-too-week decline. More layoffs are expected.

 

Homebuilder confidence showed signs of bouncing back in May, after a record plunge in April. Although still in negative territory, the NAHB Housing Market Index was up 7 points.

April existing home sales dropped 17.8% month-to-month and were 17.2% lower than April 2019. That puts the annualized pace at 4.33 million units, the slowest since September 2011.

The drop in available home inventory pushed home prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800.

 


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