After two sluggish months of Retail Sales, consumers ramped up their spending in April at auto dealers, hardware stores and e-commerce outlets. Retail Sales rose 0.4 percent from March to April, and March Retail Sales were revised upward to 0.1 percent from -0.3 percent originally reported.
Consumer spending makes up two-thirds of overall economic activity, and increases in retail spending are a welcome sign. The second reading on first quarter Gross Domestic Product (GDP) rose to 1.2 percent from 0.7 percent, slightly higher than expected. While that is still a low number, the Atlanta Fed is predicting second quarter GDP to rise to 4.1 percent.
April showed growth in job creation following a dismal March. The Bureau of Labor Statistics reported that 174,000 jobs were created, although this was below the 180,000 expected. March was revised lower to 50,000 new jobs, where the low numbers were due in part to harsh weather. The Unemployment Rate fell to 4.4 percent in April, the lowest level in 10 years.
In housing news, the National Association of REALTORS® reported April's Existing Home Sales fell 2.3 from March, mainly due to low inventories of homes for sale. Existing home inventories are at a 4.2-month supply, well below the six months seen as normal. April's New Home Sales fell to 569,000 units, below the expected 605,000 and the 642,000 sold in March, while year-over-year sales were up just 0.5 percent. The decline in new home sales were due in part to rising building material costs, not enough lots ready for building, and a shortage in labor supply. But new home inventories are running at a much healthier 5.7-month supply.
Home price gains remain strong. The March S&P/Case-Shiller 20-City Home Price Index rose 5.9 percent year over year from March 2016, matching the February reading. Gains are the biggest since July 2014. From February to March, prices were up 0.9 percent.
New construction certainly could provide much-needed relief from rising home prices and house-hunt frustrations. Read about what's happened recently in What to Watch below.
If you have any questions about housing or refinancing opportunities, please reach out at any time.