Market Update as of August 28, 2018

New And Existing Home Sales Dip…Again
Sales of new U.S. single family homes unexpectedly fell in July to a nine-month low in a sign the housing market was cooling and could give less support to the overall economy. The Commerce Department said on Thursday new home sales decreased 1.7-percent to a seasonally adjusted annual rate of 627,000 units last month, the lowest level since October 2017. June's sales pace was revised up to 638,000 units from the previously reported 631,000 units. Economists polled by Reuters had forecast new home sales, which account for about 10 percent of housing market sales, rising to a pace of 645,000 units in July. New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They increased 12.8 percent from a year ago. Housing market data has weakened in recent months, with home resales declining in July for a fourth straight month.

Existing U.S. home sales fell for a fourth straight month in July as a shortage of properties on the market pushed up house prices, likely sidelining some potential buyers. The National Association of Realtors said on Wednesday existing home sales fell 0.7 percent to a seasonally adjusted annual rate of 5.34 million units last month. July's drop marked the longest streak of monthly declines since 2013. Economists polled by Reuters had forecast existing home sales would gain 0.6 percent to a rate of 5.40 million units in July. Sales fell across the Northeast, South and Midwest, but rose in the West. Existing home sales, which make up about 90 percent of U.S. home sales, fell 1.5-percent from a year ago in July. Sales have been stymied by an acute shortages of homes on the market for several months, although the NAR said inventory showed signs of stabilizing last month.

Jobless Claims Continue To Collapse
The number of Americans filing for unemployment benefits fell last week, a sign the labor market was holding firm despite tensions between the United States and its trading partners that have spawned restrictions on global commerce. Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 210,000 for the week ended Aug. 18, the Labor Department said on Thursday. It was the third straight week of declines for claims, which have dropped so low that economists have scram- bled for explanations. In July, claims fell to their lowest level since 1969 even though the workforce is much larger than in prior decades. Economists polled by Reuters ahead of Thursday's report had forecast claims rising to 215,000 in the latest week. The signs of strength in the U.S. labor market have been a key reason behind the Federal Reserve's ongoing campaign to raise interest rates.

Commercial Lending Demand Slumps

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Courtesy of Sotheby's International Realty's in-house Lender Simon Atik, 310.880.8414, Simon.Atik@grarate.com, Vice President of Mortgage Lending, Guaranteed Rate Affinity.

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