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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.

Week Ahead

Forecasts

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.

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