Weekly economic review & outlook
Housing demand shifting to new homes
DEC. 23, 2019
You Need to Know
Week in review
Existing home sales held back by lack of supply
Although they have been up modestly over the past year, sales of existing homes slipped a bit in November as low inventories remain a constraint.
Housing starts rise to meet demand for new homes
Starts climbed to nearly an expansion high in November as strong homebuyer demand drove further construction of new homes.
Modest increase expected for new home sales
New home sales are expected to edge higher over October’s already-solid number, helped in part by existing home supply constraints.
Durable goods orders should climb again
While manufacturing is still in an overall contraction, Boeing had a gain in November of 22 net new aircraft orders, which should help to boost durable goods orders.
Recent housing data show continued strong demand from homebuyers as well as a further swing in the housing market toward new builds. Existing home sales dropped by 1.7 percent for November to an annualized pace of 5.35 million units. While demand fundamentals remain highly positive (including solid job growth, low mortgage rates, and above-trend household formations), supply constraints continue to hold back existing home sales activity. As a result, existing sales were up by only 2.7 percent over the past year — compared with a 31.6 percent increase for new home sales as of October.