Weekly economic review & outlook
Housing activity takes a COVID plunge
May 26, 2020
You Need to Know
Week in review
Big declines in sales and home construction for April
Existing home sales plunged by nearly 18 percent during April while housing starts dropped by 30 percent from March as stay-at-home orders curtailed housing activity.
LEI confirms a recession environment
The 12-month change in the Index of Leading Economic Indicators (LEI) crashed to -11.5 percent for April, in line with prior recessionary periods.
Another large drop expected for new home sales
Stay-at-home orders and record job losses are expected to lead to another large drop in the pace of new home sales.
Contraction in consumer spending could set another record
After a record decline in consumer spending in March, an entire month of economic shutdown could cause that record to fall just one month later.
Widespread stay-at-home mandates, fears of virus contraction, and a sharp jump in unemployment combined to drastically cut house shopping in March, causing April existing home sales to crash by 17.8 percent to an annualized pace of 4.33 million units. After reaching an expansion peak in February, sales activity pulled back to its lowest level since 2011 while total transactions were down by a sharp 17.2 percent from April 2019. This was a bit better than expected, however, as pending home sales for March were down by nearly 21 percent.