US Housing Confidence Reaches New Peak

Confidence in housing is at a new peak, with enthusiasm among sellers soaring, according to the April Fannie Mae Home Purchase Sentiment Index® (HPSI). At 91.7, the Index plowed through its previous record, climbing 3.4 percentage points month-over-month and five points year-over-year.

“The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home-buying season,” says Doug Duncan, chief economist and senior vice president at Fannie Mae.

What is driving the lift? Americans are optimistic about their prospects for selling, with 45 percent believing now is ideal to list—a high point since the start of the survey. By the same token, almost half (49 percent) of Americans believe home prices will rise—conditions that, for sellers, translate to an upper hand. Confidence can dissipate, however, if inventory remains sparse, according to Duncan.📷

“High home prices and good economic conditions helped pushthe share of Americans who think it’s a good time to sell to a fresh record-high; however, the upward trend in the good-time-to-sell share seen since last spring has done little to release more for-sale inventory,” Duncan says. “The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales.”

Despite constrained inventory, sales are strengthening, with both existing and pending sales squeezing out wins in March, the National Association of REALTORS® (NAR) reported—and, according to the Commerce Department, new-home sales tracked up.

The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).

Source: NAR

April Jobs Report: Unemployment 3.9%

The unemployment rate fell to 3.9 percent in April, an 18-year low, even as non-farm payrolls rose by just 164,000, according to a report Friday from the Bureau of Labor Statistics.

Economists surveyed by Reuters had expected payroll growth of 192,000 and the jobless rate to drop by one-tenth of a percent to 4.0 percent. The official jobs tally initially showed an increase of an upwardly revised 135,000 in March. Stock market futures moved lower following the release, while government bond yields also drifted downward.

The closely watched average hourly earnings number rose by 4 cents, equating to a 2.6 percent annualized gain, a bit off the pace from the previous month. The average work week was unchanged at 34.1 hours.

A more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons fell to 7.8 percent, the lowest since July 2001.

The drop in the unemployment rate came amid another decline in the labor force participation rate to 62.8 percent, the lowest since January.

Professional and business services created the most new jobs, with 54,000, while manufacturing and health care added 24,000 apiece. Mining saw 8,000 new jobs, bringing to 86,000 the total unemployment growth since October 2016 for a sector that President Donald Trump promised to target when he campaigned.

The report comes with job creation off to its best start in five years during the first quarter. Markets have been watching the employment numbers as much for signs of wage inflation as for the pace of job gains. Average hourly earnings have been increasing at about a 2.7 percent pace, which is above the recovery pace but still short of where Federal Reserve officials are targeting.

The central bank is also looking closely at the data. Fed officials have indicated they are likely to raise interest rates a total of three times in 2018, though a faster pace of wage inflation could make for more aggressive policy moves.

Source: CNBC.com