SURPRISE INCREASE IN HOME SALES
Homes sales increased and inventory of unsold homes droped to 8.5 months.
In a welcome sign of strength, existing home sales rose 7.7% in Augustto a seasonally adjusted annual rate of 5.03 million units from anupwardly revised 4.67 million units in July. The inventory of unsoldhomes on the market decreased to 3.577 million, an 8.5-month supplyat the current sales pace, down from a 9.5-month supply in July.
The National Association of Home Builders/Wells Fargo monthly housingmarket index fell one point in September to 14. An index reading below50 indicates negative sentiment about the housing market.Retail sales fell 1.2% for the week ending September 17, according to theICSC-Goldman Sachs index. On a year-over-year basis, retailers saw salesincrease 3.4%.
The combined construction of new single-family homes and apartments inAugust fell 5% to a seasonally adjusted annual rate of 571,000 units.Single-family starts decreased 1.4%. Multifamily starts fell 13.5%.Applications for new building permits, seen as an indicator of futureactivity, rose 3.2% to an annual rate of 620,000 units.
MORTGAGE APPLICATIONS INCREASE SLIGHTLY, BUT PURCHASE VOLUMEDOWN.
The Mortgage Bankers Association said its seasonally adjusted compositeindex of mortgage applications for the week ending September 16 rose0.6%. Refinancing applications increased 2.2%. Purchase volume fell 4.7%. This may suggest that more people are applying for loansbut also that more people are being denied for loans because of tightcredit constraints by lenders.
INDEX OF LEADING ECONOMIC INDICATORS UP
The index of leading economic indicators — designed to forecasteconomic activity in the next three to six months — rose 0.3% inAugust, following a 0.5% increase in July.
UNEMPLOYMENT CLAIMS DOWN
Initial claims for unemployment benefits fell by 9,000 to 423,000 forthe week ending September 17. Continuing claims for the week endingSeptember 10 fell by 28,000 to 3.7 million.
Upcoming on the economic calendar are reports on new home sales onSeptember 26, the housing price index on September 27 and pendinghome sales on September 29.