Home Sales Decline as Prices Rise, Durable Goods Orders Increase, Consumer Confidence Slips
Home Sales Decline as Prices Rise
Home sellers received mixed news in the latest batch of U.S. housing data for March, as the number of single-family homes sold declined while prices escalated.
The U.S. Census Bureau and Department of Housing and Urban Development reported Tuesday that 763,000 homes were sold nationwide during March. That was 8.6% below February’s total and 12.6% below the March 2021 figure.
But the median price for those homes sold during March was $436,700 — up $77,000, or 21%, from the March 2021 median. A limited housing supply continues to prop up prices nationwide.
“While we expect higher mortgage rates to increasingly weigh on sales, demand appears to still be outpacing the speed at which homebuilders can complete construction, with many homebuilders continuing to report that they are limiting the number of orders being accepted,” Mark Palm, deputy chief economist at Fannie Mae, said in a statement on the new housing numbers. “Though the number of new homes available for sale increased by 3.8% in March to 407,000 homes, over half of this increase was driven by homes for sale that were not yet started, which now sits at a record level.”
Those sentiments were echoed by Will Doerner, supervisory economist with the Federal Housing Finance Agency, which issued its own numbers Tuesday showing February home prices were up 19.4% from a year ago. “Acceleration approached twice the monthly rate as seen a year ago,” Doerner said in a statement. “Housing prices continue to rise owing in part to supply constraints.”
Durable Goods Orders Increase
Busy industrial properties could be kept humming after a Commerce Department report that March orders for manufactured durable goods rose $2.3 billion or 0.8% from the prior month, to $275 billion.
The department’s Census Bureau reported Tuesday that the number has now risen during five of the past six months for orders and shipments of durable goods, which include products that are expected to have a long usable life span, usually more than three years. The one dip came during February, when orders declined 1.7% from the prior month.
The bureau said the increase in orders was led by computers and electronic products, which rose two of the last three months and were up by $700 million or 2.6% in March, reaching $26.3 billion.
Consumer Confidence Slips
Consumer confidence ticked down slightly in April after a modest increase in March, according to the latest data from the Conference Board, a nonprofit business research group.
Using a base of 100 for 1985, the group’s latest Consumer Confidence Index, gauging consumer survey responses to questions on factors such as U.S. business and labor market conditions, was 107.3 for April, down from 107.6 in March. Despite nervousness about rising prices and European war headlines that had some souring on the present situation, the group’s short-term expectations index actually ticked up slightly.
“Expectations, while still weak, did not deteriorate further amid high prices, especially at the gas pump, and the war in Ukraine,” said Lynn Franco, the Conference Board’s senior director of economic indicators, in a statement Tuesday. “Vacation intentions cooled but intentions to buy big-ticket items like automobiles and many appliances rose somewhat.”
Still, Franco noted rising interest rates and other price inflation are putting downward pressure overall on purchasing intentions, and “may further curb consumer spending this year."