Weakness in Housing Highlights Last Week’s Economic News

​Weakness in housing measures highlighted last week’s economic news, as pending home sales barely inched up, and home sales and mortgage applications declined. In other news, the Federal Reserve kept its federal funds rate unchanged.

• Pending home sales inched up 0.4% in March, missing the consensus range of 0.5% to 1.8%. Meanwhile, according to the National Association of Realtors, home sales were down 3% compared to March 2017, marking the third straight month of annual declines.

• According to the Institute for Supply Management (ISM), manufacturing activity slowed in April, and a separate report from the Commerce Department showed construction spending fell unexpectedly in March. Still in growth territory, manufacturing activity marked its second month of slowing in April. Meanwhile, construction spending fell, largely due to a sharp decline in homebuilding.

• The Federal Reserve held its FOMC meeting last week and kept interest rates unchanged from March’s range of 1.50-1.75%. The Fed also noted that wages and prices are now growing at 2% a year, according to the personal consumption expenditures (PCE) price index.
  

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• Mortgage applications for the week ended April 27th fell 2.5%, according to the Mortgage Bankers Association, as interest rates on some 30-year, fixed-rate home loans reached their highest levels in more than 4½ years.