Keeping You Informed

New home sales rose to 512,000 units at a seasonally adjusted annual rate in February 2016, up 2.0% over January. That compares to an average sales pace of almost 395,000 units annually during the previous six years, and a rate of just over 900,000 units between 2000 and 2009.1   The median price of new homes sold in February was $301,400, a 2.6% gain over the median price in February 2015.1

Existing home sales dropped 7.1% in February to an annualized sales pace of 5.08 million units. That's below 2015's sales rate of 5.23 million units. By comparison, the annual sales rate averaged almost 5.6 million units during 2000-09, and just over 4.7 million units over the last six years.2   The median price of existing homes sold in February was $210,800, a 4.4% gain over the median price in February 2015.2

The Consumer Price Index dropped 0.2% in February, but the CPI less food and energy – known as the core CPI – rose 0.3% for the second consecutive month. That's the biggest two-month increase in the core CPI in almost ten years. Since February 2015, the CPI is up 1.0% while the core CPI is up 2.3%.3

The net worth of US households grew by 3.1% in 2015, a slowdown from the 6.0% gain posted over 2014.4   Owners' equity in real estate rose 10.2% in 2015, decelerating from 2014's 10.7% gain. As a percentage of real estate owned, owners' equity stands at 56.9%, the highest share since mid-2006. Its recessionary low of 37.1% came in early 2009.4   Industrial production dropped 0.5% in February. The index, which measures output at the nation's factories, mines, and electric and gas utilities, has increased in only two of the past 14 months.5   The average rate on 30-year fixed-rate mortgages in Freddie Mac's survey was 3.71% during the week ending March 24, down two basis points from the previous week. The February average of 3.66% was 21 basis points below January's 3.87% average. All rates quoted have fees and points averaging 0.5% to 0.6% of the loan amount.6 "New Residential Sales in February 2016", Census Bureau, March 23, 2016.www.census.gov/construction/nrs/pdf/newressales_201602.pdf "Existing-Home Sales Fizzle in February", National Association of Realtors®, March 21, 2016.www.realtor.org/news-releases/2016/03/existing-home-sales-fizzle-in-february. "Consumer Price Index - February 2016", Bureau of Labor Statistics, March 19, 2016.www.bls.gov/news.release/archives/cpi_03162016.pdf "Financial Accounts of the United States: Flow of Funds, Balance Sheets, and Integrated Macroeconomic Accounts", Release Z.1, Table B.101: Balance Sheet of Households and Nonprofit Organizations, Lines 41, 52 and 53. Federal Reserve Board of Governors. March 10, 2016. www.federalreserve.gov/releases/z1/current/z1r-5.pdf.  "Industrial Production and Capacity Utilization", Release G.17, Federal Reserve Board of Governors, March 16, 2016. www.federalreserve.gov/releases/g17/Current/g17.pdf. Freddie Mac Primary Mortgage Market Survey, Mar 24, 2016. www.freddiemac.com/pmms/ The Federal Reserve Bank of St Louis Economic Data system (FRED) was used to collect data on new home sales and prices, existing home sales and prices, CPI, household net worth and owners' equity, and industrial production.