Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Real estate made headlines last week, with existing home sales and construction starts on new homes both hitting their highest pace since 2007, while lay-offs continued to stay at low enough levels to indicate a growing job market.
Existing Home Sales
The rate of existing home sales hit their fastest pace since February 2007, according to data released last week by the National Association of Realtors. Transactions of existing single-family homes, townhomes, condominiums and co-ops increased 2 percent to an annual rate of 5.59 million in July from a pace of 5.48 million in June. July's performance also marked the 10th consecutive monthly year-over-year sales increase was 10.3 percent higher than a year ago.
"The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now," said NAR chief economist Lawrence Yun. "As a result, current homeowners are using their increasing housing equity towards the down payment on their next purchase."
The median existing-home price for all housing types in July grew to $234,000, which as 5.6 percent above July 2014. This was the 41st straight monthly price increase, and Yun noted that decreased affordability could "slowly dampen demand."
One factor that can push prices higher is declining inventory, which was a factor in July's activity. Total housing inventory declined 0.4 percent in July to 2.24 million existing homes for sale, and was 4.7 percent lower than July 2014's 2.35 million units. This represented a 4.8-month supply at July's sales pace, down from 4.9 months in June.
Housing Starts and Permits
New real estate saw a similar charge with starts on new home construction hitting an eight-year high. Starts on private homes in July were at a seasonally adjusted annual rate of 1.2 million units, which marked a 0.2-percent increase over June, and were 10.1 percent higher than July 2014's rate. Starts on single-family homes in July hit a rate of 782,000, which was a whopping 12.8 percent higher than June.
July's pace was the fastest pace of new housing starts since December 2007, which would indicate that while there might be some concerns that prices could hurt demand, at present, builders clearly anticipate increased sales.
"There's enough demand and there's a little catch-up going on here in terms of housing construction," Eric Green, head of U.S. economic research at TD Securities, told Bloomberg. "When we're adding homes like this, it has a significant multiplier effect on the economy, in housing-related retail sales, jobs, consumption. We are exactly where we want to be in housing."
Initial Jobless Claims
First-time claims for unemployment benefits filed by the recently laid off during the week ending August 15 notched up to 277,000, a gain of 4,000 from the preceding week's level of 273,000, the Employment and Training Administration reported last week. This was below the 300,000-claim mark, which economists say denotes an improving job market.
"[Claims are] still close to their lowest level in several decades, and that's a good sign," HSBC Securities USA Inc. Economist Ryan Wang told Bloomberg. "It's a stable, low level of claims."
The four-week moving average — considered a more stable gauge of initial jobless claims — saw similar performance, rising to 271,500, a 5,500-claim increase from the prior week’s revised average.
Economic News in Review Greenville SC
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