The National Association of REALTORS® reported that after two straight monthly declines, Existing Home Sales jumped 3.2 percent from August to September. First-time buyers claimed a 34 percent share of home purchases, a high not seen in over four years.
New Home Sales also rose from August to September, according to the Commerce Department, although the 3.1 percent increase came after August was revised lower to 575,000 units from the 609,000 originally reported. The good news is New Home Sales are up nearly 30 percent from September 2015.
For all buyers, however, limited housing inventory remains an issue … and that’s where new construction comes in.
The first reading on third quarter GDP rose by 2.9 percent, above the 2.5 percent expected and well above the anemic 1.4 and 0.8 percent reported in the second and first quarters respectively. GDP measures the pace of economic activity and represents the total dollar value of all goods and services produced over a specific time period. A reading of 2.5 to 3 percent is considered optimal. This initial third quarter reading marks the fastest pace of growth in two years.
Yet, all was not rosy within the GDP report. Consumer spending grew by just 2.1 percent, well below the 4.3 percent in the second quarter. However, there was some hope for retailers late in the third quarter. After declining in August, Retail Sales surged by 0.6 percent in September. Retailers are hoping consumers remain ready to shop heading into the crucial holiday season.
Wholesale inflation came in hotter than expected in September. Consumer inflation also edged higher, though still on the tame side. From September 2015, the Consumer Price Index was up 1.5 percent, on the heels of a 1.1 percent annual increase in August. Inflation trends are important to watch because inflation reduces the value of fixed investments, like Mortgage Bonds. When inflation rises, it can impact home loan rates, since they are tied to Mortgage Bonds.
The good news is that home loan rates remain near historic lows, helping offset home price gains.
If you have any questions about housing or refinancing opportunities, please reach out at any time.