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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.

Week Ahead

Forecasts

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.

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