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Economic Report 04.29.19

KEY MARKET INDICATORS as of Apr 29, 2019

slowing home price growth

March Housing Starts, Home Sales, Home Prices

The housing market data released in the past two weeks provided mostly positive news about the market going into the home selling season. Both existing home sales and new home sales suggest that potential homebuyers are back in the market, helped by a lower interest rate (down by 70 basis points from November) and slowing home price growth (down by 2 percentage points). The rising homebuyer demand drove existing home sales for Q1 to 5.21 million units seasonally adjusted annual rate (SAAR), which is slightly ahead of Q4’s 5.14 million units. The for-sale inventory has also been improving, with months of supply rising year-over-year throughout Q1. That gives potential buyers
more choice and more negotiating leverage. Historically, rising months of supply has supported slowing home price growth, so housing affordability may continue to improve. Stronger demand also helped to strengthen new home sales. Sales for Q1 reached 660,000 units SAAR, well ahead of Q4’s 575,000 units. In particular, most of the growth in the market for new homes came from the under-$300,000 segment, sending sales in that segment to its highest level since 2008. While sales have rebounded in Q1, homebuilding activities remain muted at 1.19 million units SAAR in Q1. That is a potential concern since homebuilders may have temporarily stopped starting higher-priced homes, but have not expanded production of lower-priced homes. If that’s the case, the rise of lower-priced new homes may not last.

slowing home price growth

Tian Liu, Genworth Mortgage Insurance Chief Economist
tian.liu@genworth.com
919 807.9584

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Disclaimer: Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinions of Genworth Mortgage Insurance and are subject to change without notice. Genworth Mortgage Insurance has no obligation to provide revised assessments and assumes no duty to update information in the event of changed circumstances. While we have gathered this information from sources believed to be reliable, Genworth Mortgage Insurance cannot guarantee the accuracy of the information provided. Certain data discussed in this report is publicly available only on a time delayed basis. Genworth Mortgage Insurance strives to analyze data as it becomes available, but makes no representation that all data is reviewed immediately upon release.