This week’s housing news was mixed. While new home sales increased 2% M/M, they declined 6.1% Y/Y. Existing home sales, however, dropped a whopping 7.1% M/M. Bill McBride at Calculated Risk argues low inventory and pockets of regional weakness are to blame. The New York Times added recent market volatility probably lowered sentiment, contributing to the weakness.This graph from the FRED system places the information into a longer-term context:
Existing home sales moved sideways in 2015. New home sales peaked early, trended lower until the end of the summer, moved sharply higher and then back-off a bit of the last few months. But, in general the trend is more or less sideways. My co-blogger argues we’re late in the housing cycle here. Also see this post from Political Calculations. It’s also important to remember the new home market is far more economically important because it creates far more economic activity.
The Census reported new orders for durable goods declined:
New orders for manufactured durable goods in February decreased $6.6 billion or 2.8 percent to $229.4 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 4.2 percent January increase. Excluding transportation, new orders decreased 1.0 percent. Excluding defense, new orders decreased 1.9 percent.
Taking a longer view, notice that all three series (total, ex-defense, ex-transport) have been moving sideways for approximately 12-18 months:
This falls in line with a general theme of weaker industrial production, which, thanks to a strong dollar, weak oil and declining emerging markets, has been trending lower for the last 12 months as well.
Finally, BEA released their last estimate of 4Q15 GDP, which was 1.4%. This was another increase: the first release printed at .7 and the second at 1%. Here’s a table from the latest report:
