A biweekly review of the housing economy.

1. Eye on the Economy
New Home Sales Disappoint in June
August 6, 2014
eyeonhousing.org

2. Rates on New Home Loans
2
•Average effective mortgage rate for
new home sales rose
•Current effective rate for new homes is
slightly higher than the average for
existing homes
•Read more here

3. New Home Sales
3
•Market share of cash sales for new
homes increased
• Higher than 2002-2003
average
•Market share of FHA-backed new
home sales declined
•Read more here

4. Construction Spending
4
•Residential construction spending up
year-over-year
•Dollar volume pace of home building
and remodeling down for last two
months
•Improvement spending is down
negligibly year-over-year
•Read more here

5. Housing Prices
5
•House price growth remains above
rate of inflation
•S&P/Case-Shiller 20-City Composite
index eased to 9.3% in May
•FHFA Purchase-Only house price
index increased 5.6%
•Read more here

6. Housing Prices Cont.
6
•18 metro areas exhibited slower rates
of growth
•49 economist panel: Median forecast
in the FHFA index for July 2014 was
4.7%
• Read more here

7. Pending Home Sales Index
7
•PHSI fell 1.1% for the month
• Ends three month growth
streak
• June was down 7.3% year-over-year
•Read more here

8. Existing Home Sales
8
•Existing home sales had a 2.6%
monthly increase in June
•Existing sales passed the 5 million
mark
• First time since October 2013
•Read more here

9. Remodelers’ Confidence
9
•Remodeling Market Index rose three
points in Q2 of 2014
•Two out of three index components
improved
•Indicators of future activity improved in
Q2 of 2014
•Read more here

10. Homeownership Rate
10
•Housing demand from newly formed
households favors rental-markets over
for-sale
•Homeownership rate fell to 64.8%
•Read more here

11. The Employment Situation for July
11
•Payroll employment increased by
209,000 for the month
•Unemployment rose 0.1%
• Due to an addition of 329,000
into the labor force
•Read more here

12. GDP & FOMC
12
•GDP Growth was up 4%
•Q2 experienced growth for exports
and inventory investment
•NAHB is forecasting 1.7% overall GDP
growth for the year
•Read more here

13. GDP & FOMC
13
•Federal Reserve monetary policy
committee agreed that Q1 GDP decline
was due to transitory factors
•Indicated willingness to keep federal
funds rate at the current low level
•Winding down asset purchase
program
•Read more here

14. Affordability Pyramid
14
•For a $1,000 increase in median new
home price, more than 206,000
households would be priced our of the
new home market
•87 million households can afford a
home price higher than $100k
• 22.8 million can afford a new
home priced at $175k
•Read more here

15. Apartment Buildings Benefit
from Sustainability
15
•Analysis of the relationship between
multifamily housing and mortgage
default for apartment owners
•Less likely if:
• Within a mile of open space
• In a neighborhood with
significant retail presence
• Accessible to transit
• Meets certain affordability
thresholds
•Read more here