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Week In Review – June 29, 2018

Week In Review

Volume 24, Number 22

Reginald J. Smith, Community Development Manager – Bank of Kansas CityReginald J. Smith

Economic Highlights for Week Ending June 29, 2018


MONDAY, June 25th

New home sales rose 6.7% in May to an annualized pace of 689k following a decline of 3.7% in April and an annual rate of 646k.  With the gain last month, new home sales are now 14.1% higher than their level in May 2017. Regionally, new home sales were wildly mixed with declines of 10.0% in Northeast and 8.7% in the West while surging 17.9% in the South.  Sales were unchanged in the Midwest.  The inventory of new homes available for sale rose slightly to 299k in May which represents a 5.2-month supply at the current sales pace.  New home prices were down over the past year with the median price for a new home 3.3% lower at $313,000.  Beneath all the volatility in this report is a new home market that continues to climb at a strong but perhaps unsustainable rate, moving from around 625k to roughly 675k so far this year.  The price drop is also telling, suggesting moderation for what had been one of the strongest areas in the economy.


TUESDAY, June 26th

The S&P CoreLogic Case-Shiller 20-city home price index rose 0.8% in April from March and was up 6.6% year-over-year, down from an annual gain of 6.7% in the previous month.  All 20 major metro areas tracked by this index posted annual gains.  Seattle led the pack with a 13.1% gain, followed by Las Vegas with appreciation of 12.7% and San Francisco where home prices rose 10.9% over the past year. David M. Blitzer Managing Director and Chairman of the Index Committee noted the favorable economy and moderate mortgage rates both support recent gains in housing.  One factor pushing prices up is the continued low supply of homes for sale.  The months-supply is currently 4.3 months, up from levels below 4 months earlier in the year, but still low.

Consumer confidence dipped 2.4 points in June, falling to 126.4, as consumer expectations fell to their lowest level since December.  The softening was centered in the expectations component which fell 4.0 points to 103.2 based on faltering business and income expectations.  Present situations ratings were strong at a level of 161.1.  Overall confidence levels remain high which points to continued strong consumer spending in the next month or two.


WEDNESDAY, June 27th

The MBA mortgage applications index slumped 4.9% for the week ending June 22.  The purchase index decreased 5.9% last week as the refinance index declined 3.5%.  Contract mortgage interest rates were mixed last week with 30-year fixed rate conforming mortgages ($453,100 or less) up 1 bps to 4.84%.

The NAR’s pending home sales index fell 0.5% in May to a level of 105.9.  The index tracks the number of signed sales contracts and the moderation last month indicates flat existing home sales over the next couple of months.  Regionally in May, pending home sales were little changed in the Midwest, Northeast and West while the South declined sharply.  Additionally, the overall index remains down 2.2% from its year ago level in May 2017 which points to a slight downward trend in total home resales.

UFSC Week In Review

THURSDAY, June 28th

Initial jobless claims rose more than expected in the June 23 week but remain very low, at 227,000 which lifts the 4-week average only marginally to 222,000.  This average is roughly in line with readings in May which points convincingly at another strong employment report for the month of June.


FRIDAY, June 29th

Personal income rose 0.4% in May as expected and including a second straight moderate rise of 0.3% in the wages and salaries component.  Personal spending increased just 0.2% on the month, which was on the weak side and could be a drag on second quarter GDP growth.  A closely watched inflation gauge contained in this data series, the core PCE price deflator rose 0.2% on the month and is now up 2.0% on the year, smack dab in the middle of the Fed’s target for inflation. That virtually guarantees, at least two more rate hikes to come this year.

Stock Market Close for the Week



A Week Ago


-248.17 or -1.01%

-159.98 or -2.08%


After a week of mostly housing market related data, reports in the coming week wrap up the sector for the month. Watch for new home sales and pending home sales, both on next week’s calendar.

Key Interest Rates


6 Mos Ago

1 Yr Ago

Prime Rate

Fed Discount

Fed Funds

11th District COF

10-Year Note

30-Year Treasury Bond

30 -Yr Fixed (FHLMC)

15 -Yr Fixed (FHLMC)

6-Mo Libor (FNMA)

Sources: IBC’ s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco