The economic calendar was relatively quiet, with unemployment numbers and housing reports dominating the headlines.
Initial Jobless Claims Rise in Latest Week
Another 1.416 million people filed for unemployment benefits for the first time during the week ending July 18, an increase of about 100,000 people from the previous week's number of 1.3 million. California (+292K), Florida (+105K) and Georgia (+120K) saw the largest gains.
Continuing Claims improved significantly from 17.304 million to 16.197 million, but there is much more to this headline number because the Pandemic Unemployment Assistance (PUA) Claims are not captured.
PUA Claims reflect people like gig workers and contractors who usually would not be approved for unemployment benefits. These claims, again which are separate and in addition to the headline claims, totaled 975,000 in the latest week. Continuing PUA Claims did improve slightly from 14.2 million to 13.18 million but they are still significant.
All told, the total number of people receiving some type of benefits improved slightly from 32 million to 31.8 million. Based on the total number of people receiving benefits, divided into the labor force of 160 million, there is likely a 20% unemployment rate.
Home Sales Surge in June
The National Association of REALTORS (NAR) reported that sales of existing homes jumped 20.7% in June, which was the largest one-month jump ever, albeit still slightly beneath expectations. The report measures closings in the month of June and likely represents buyers shopping for homes in April and May.
Sales were down 11.3% year over year, but this is a big improvement from the -27% annual reading we saw in May's report. First-time home buyers made up 35% of home sales, up from 34%.
Inventory remains tight, as there were only 1.57 million units for sale, down 18.2% when compared to June of last year. The median home price was reported at $295,300, up 3.5% year over year.
"The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. "This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
Meanwhile, New Home Sales, which measure signed contracts on new homes, also came in strong, up 13.8% from May to June. This was much stronger than the 4% gain anticipated. Sales are now up 7% when compared to June of last year, which is quite an impressive amount especially given the pandemic.
The median new home price increased 5.8% year over year to $329,300, while the majority of homes that sold were between $200,000 and $300,000.
An Update on Home Appreciation
There was news on home appreciation from the Federal Housing Finance Agency House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts.
Home prices fell 0.3% from April to May, but they are still up 4.9% compared to May of last year. However, May's 4.9% year-over-year reading is a bit lower than the reported 5.5% annual gain in April and 5.9% in March.