Weekly economic review & outlook
Housing market thaws from February’s freeze
April 26, 2021
You Need to Know
Week in review
New home sales jump as buyers rush back into the market
February’s drop in sales was mostly weather-related as new homes sales surged in March with demand likely to remain strong into the second quarter.
Leading indicators show the recovery is in full swing
The 12-month change in the Index of Leading Economic Indicators was positive again for March, another sign that the recession is in the rear-view mirror.
Massive growth expected for real GDP
Aided by two separate stimulus check distributions, falling COVID infections, and fewer government imposed in-person restrictions, growth in real GDP in Q1 is expected to surge.
A very strong gain projected for consumer spending
A combination of weak February data (due to weather), strong job growth, and trillions of dollars in stimulus set March up for record growth for personal income and a surge in personal consumption expenditures.
Existing home sales dropped by an additional 3.7 percent for March, falling to an annualized pace of 6.0 million units — the weakest sales pace since last August. But March’s reported sales mainly represented purchase contracts that were signed during February when cold and snowy weather disrupted home shopping across the country. New home sales, which are counted at contract signing rather than at closing, jumped by 20.7 percent for March as the hot housing market conditions resumed with more seasonable weather. The 1.02 million annualized pace of new sales was the highest since August 2006.