Sales of newly built homes rose in July to the highest level in nearly a decade, a sign of solid momentum in the US housing market. Purchases of new single-family homes rose 12.4% in July from a month earlier to a seasonally adjusted annual rate of 654,000, the Commerce Department said Tuesday.
That was the highest level since October 2007. “New home sales soared again,” said Ralph McLaughlin, economist at real estate website Trulia. “This is a continued sign that demand for new homes remains solid in a low interest rate, low unemployment environment.” Economists surveyed by The Wall Street Journal had expected home sales in July to slow to a pace of 580,000. Sales in June were revised down to a pace of 582,000 from an initially estimated 592,000.
Through the first seven months of the year, new home sales also rose 12.4%, compared with the same period in 2015. The housing market has been a bright spot in the economy this year. Historically low mortgage interest rates, improving income growth and steady job creation have supported buying of both new and existing homes.
Sales of previously owned homes rose to their strongest pace in nearly a decade in June, according to the National Association of Realtors. The group will release July figures on Wednesday. Sales of newly built homes account for less than a tenth of total US homebuying activity.
Also, data on such purchases are volatile from month to month and subject to later revision. July’s increase came with a margin of error of plus or minus 12.7 percentage points. New-home sales in July were up 31.3% from a year earlier. The latest figure brings new-home sales back to the level recorded just before the recession began.
But the pace remains well below the peak level of 1.39 million in July 2005. Last month was the first when the rate exceeded 600,000 since early 2008. Before the recession, the last full year below that mark was 1991. Tuesday’s report showed there was a 4.3-month supply of newly built homes available at the end of July. That was the smallest supply in three years. The median sale price of a new home sold in July was $294,600, down slightly from $296,000 a year earlier.
Oil extends losses after EIA data show US crude supplies up 2.5 mln barrels
Oil futures lost more ground on Wednesday after the US Energy Information Administration reported that domestic crude supplies rose by 2.5 million barrels in the week ended Aug. 19.
That was significantly above the 200,000-barrel climb expected by analysts polled by S&P Global Platts, but the American Petroleum Institute late Tuesday reported a rise of nearly 4.5 million barrels, according to sources. Gasoline supplies were flat for the week, while distillate stockpiles edged up by 100,000 barrels, according to the EIA. October crude fell $1, or 2.1%, from Tuesday’s settlement to $47.10 a barrel on the New York Mercantile Exchange. Prices traded at $47.50 before the data.
NAR – existing-home sales lose steam in July
Slowed by frustratingly low inventory levels in many parts of the country, existing-home sales lost momentum in July and decreased year-over-year for the first time since November 2015, according to the National Association of Realtors (NAR).
Only the West region saw a monthly increase in closings in July. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2% to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June. For only the second time in the last 21 months 2, sales are now below (1.6%) a year ago (5.48 million).
The median existing-home price for all housing types in July was $244,100, up 5.3% from July 2015 ($231,800). July’s price increase marks the 53rd consecutive month of year-over-year gains. Total housing inventory at the end of July inched 0.9% higher to 2.13 million existing homes available for sale, but is still 5.8% lower than a year ago (2.26 million) and has now declined year-over-year for 14 straight months. Unsold inventory is at a 4.7-month supply at the current sales pace, which is up from 4.5 months in June.
The share of first-time buyers was 32% in July, which is below last month (33%) but up from 28% a year ago. First-time buyers represented 30% of sales in all of 2015. All-cash sales were 21% of transactions in July, down from 22% in June, 23% a year ago and the lowest share since November 2009 (19%). Individual investors, who account for many cash sales, purchased 11% of homes in July, unchanged from June and down from 13% a year ago. Seventy% of investors paid in cash in July.
According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage dropped from 3.57% in June to 3.44% in July. Mortgage rates have now fallen five straight months and in July were the lowest since January 2013 (3.41%). The average commitment rate for all of 2015 was 3.85%.
NAR President Tom Salomone says in addition to affordability concerns, an issue seen earlier in the housing recovery may be reemerging. Realtors® are indicating that appraisal complications are appearing more frequently as the reason why a contract signing experienced a delayed settlement. “Appraisal-related contract issues have notably risen over the past year and were the root cause of over a quarter of contract delays in the past three months,” he said.
“This is likely a combination of sharply growing home prices in some areas, the uptick in home sales this year and the strong refinance market overworking the already reduced number of practicing appraisers. Realtors® are carefully monitoring this trend, and some have already indicated they’re extending closing dates on contracts to allow extra time to accommodate the possibility of appraisal-related delays.”
Coming in at the lowest share since NAR began tracking in October 2008, distressed sales – foreclosures and short sales – were 5% of sales in July, down from 6% in June and 7% a year ago. Four% of July sales were foreclosures and 1% were short sales. Foreclosures sold for an average discount of 18% below market value in July (11% in June), while short sales were discounted 16% (18% in June).
Properties typically stayed on the market for 36 days in July, up from 34 days in June but down from 42 days a year ago. Short sales were on the market the longest at a median of 95 days in July, while foreclosures sold in 54 days and non-distressed homes took 34 days. Forty-seven% of homes sold in July were on the market for less than a month.
Inventory data from Realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in July were Denver-Aurora-Lakewood, Colo., San Francisco-Oakland-Hayward, Calif., San Jose-Sunnyvale-Santa Clara, Calif., and Seattle-Tacoma-Bellevue, Wash., all at a median of 32 days; and Vallejo-Fairfield, Calif., at a median of 36 days.
Single-family home sales decreased 2.0% to a seasonally adjusted annual rate of 4.82 million in July from 4.92 million in June, and are now 0.8% under the 4.86 million pace a year ago. The median existing single-family home price was $246,000 in July, up 5.4% from July 2015.
Existing condominium and co-op sales dropped 12.3% to a seasonally adjusted annual rate of 570,000 units in July from 650,000 in June, and are now 8.1% below July 2015 (620,000 units). The median existing condo price was $228,400 in July, which is 4.1% above a year ago.
July existing-home sales in the Northeast descended 13.2% to an annual rate of 660,000, and are now 5.7% below a year ago. The median price in the Northeast was $284,000, which is 3.3% above July 2015. In the Midwest, existing-home sales fell 5.2% to an annual rate of 1.28 million in July (unchanged from a year ago). The median price in the Midwest was $194,000, up 5.0% from a year ago.
Existing-home sales in the South in July declined 1.8% to an annual rate of 2.22 million, and are now 1.8% below July 2015. The median price in the South was $214,500, up 6.6% from a year ago. Existing-home sales in the West rose 2.5% to an annual rate of 1.23 million in July, but are still 0.8% below a year ago. The median price in the West was $346,100, which is 6.4% above July 2015.
Foundation donors who met, talked with Clinton
Hillary Clinton met or talked by phone with at least 154 people from private interests, such as corporations, during her time as secretary of the state. More than half those people had donated either personally or through companies or groups to the Clinton Foundation or pledged to donate to specific programs through the charity’s international arm. Among them:
— Joseph Duffey, who once worked for Laureate Education, a for-profit education system based in Baltimore, was one of 20 people at a higher education policy dinner with Clinton in August 2009. Weeks earlier, Clinton emailed her staff looking for Duffey’s phone number. Duffey, whom Bill Clinton appointed as director of the US Information Agency, gave between $10,000 and $25,000 to the foundation in 2012. Laureate, which paid Bill Clinton more than $17 million as a consultant between 2010 and 2015, donated between $1 million and $5 million to the Clinton Foundation. Laureate also has seven commitments with the Clinton Global Initiative.
— Jeffrey Skoll, a Canadian engineer and technology investor who was the first president of internet auction site eBay. He cashed out with $2 billion in assets and used the money to finance his foundation, a technology investment firm and a Hollywood production company. The Skoll Foundation contributed between $100,000 and $250,000 to the Clinton Foundation and has partnered in at least 21 commitments to programs through the Clinton Global Initiative. In May 2009 Sally Osberg, CEO of Skoll’s charity, messaged longtime Clinton friend Jan Piercy about “the possibility of Hillary’s speaking at next year’s Skoll Forum” — a message that was relayed to Clinton. Clinton told aides by email she wanted to attend the Skoll event in the U.K. in March 2012 but was unable to attend. Instead, in April 2012, Clinton met privately with Skoll and Osberg during a State Department-sponsored forum on government-business partnerships. The same month, USAID, the State Department’s foreign aid arm, announced a partnership with the Skoll Foundation to invest in health, energy, governance and food security innovations.
— Haim and Cheryl Saban. Haim Saban is an entertainment magnate, long-time Clinton and Democratic Party fundraiser and founder of the Saban Center for Middle East Peace, a Mideast policy think tank based in Washington. His wife, Cheryl Saban, is a psychologist and writer who has been a Clinton Foundation board member since 2013. The Sabans donated between $10 million and $25 million to the Clinton Foundation — among the largest gifts to the charity. Saban met privately with Clinton at least once in September 2009 and also hosted her twice at events put on by his think tank in June 2012 and again in November 2012. Messages from both Sabans were relayed to Clinton during her tenure. In one following Clinton’s appearance at his center luncheon in June 2012, Haim Saban told her: “Very much was looking forward to hangin’. Tx again for today.” Clinton replied: “Not to worry. Loved seeing you and Cheryl and looking forward w Bill to White House tonight. See you then.”
— John Mack, the former chairman and CEO of Morgan Stanley and a political donation bundler for Clinton’s 2008 presidential campaign. In September 2011, as Morgan Stanley chairman, Mack was among a group who met with Clinton on China trade issues. In July 2012, he and his wife were scheduled to have dinner with her. They were again to have dinner with Clinton in September 2012, but Clinton canceled at the last minute, according to her emails and calendars. The Macks’ personal charity has given between $1 million and $5 million to the Clinton Foundation. Other Morgan Stanley organizations, including the bank itself, have given between $360,000 and $775,000. Morgan Stanley has also given money to six different programs through the Clinton Global Initiative.
— Randi Weingarten, president of American Federation of Teachers, a national teachers union that has backed and funded Clinton’s presidential run and allied political action committees. Under Weingarten, the AFT donated between $1 million and $5 million to the Clinton Foundation and pledged partnership commitments with other interests in four separate Clinton Global Initiative programs. Weingarten had two private meetings with Clinton in 2009 and 2012 and also joined her at a photo shoot in 2010. Her union also lobbied federal agencies on education, work, safety and other issues. In emails, Weingarten aide Tina Flournoy — now a top deputy for Bill Clinton — told Hillary Clinton in September 2009 that she and Weingarten “would like to visit you re: child labor issues.” Less than a month later, the two women met with Clinton for a half-hour. A union spokeswoman later told AP that Weingarten spoke with Clinton about refugees, global education and child labor abuses.
MBA – mortgage applications decrease in latest MBA weekly survey
Mortgage applications decreased 2.1% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 19, 2016.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3% compared with the previous week.
The Refinance Index decreased 3% from the previous week. The seasonally adjusted Purchase Index decreased 0.3% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 8% higher than the same week one year ago. The refinance share of mortgage activity decreased to 62.4% of total applications from 62.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 4.6% of total applications. The FHA share of total applications decreased to 8.9% from 9.6% the week prior. The VA share of total applications decreased to 12.4% from 13.2% the week prior. The USDA share of total applications remained unchanged from 0.6% the week prior.