Weekly economic review & outlook
Lack of supply and rising costs constraining housing
May 24, 2021
You Need to Know
Week in review
Existing home sales slip modestly for April
The supply of existing homes has yet to show any post-pandemic bounce, limiting sales volumes while driving up the prices of transacted homes.
Housing starts drop as builders face supply shortages and higher prices
Housing starts fell back sharply for April as cost pressures and supply constraints have cut into construction despite strong market demand.
New home sales expected to fall, but remain strong
Although they should pull back from March’s rapid pace, robust housing demand and a low supply of existing homes likely led to strong new home sales for April.
Consumer income/spending likely to drop
March’s stimulus checks resulted in a jump in incomes and spending, but April’s drop in retail sales already show that the spending surge was unsustainable.
Existing home sales dropped by 2.7 percent for April to extend a three-month slide. This was counter to expectations of a modest rise, as signed contracts rose during March coming out of February’s worse-than-usual weather. The annualized sales pace of 5.85 million units is still above the trend over the past decade but sales volumes have pulled back from their end-of-2020 highs.