Weeky Update 04/25/2025: Earnings Season Continues
- AT&T rings in a solid quarter
- NextEra electrifies with growth
- CACI defends its strategy
- Google search finds results
Housing market
New home sales, according to the US Census Bureau in data released Wednesday, rose 7.4% in March to an annualized rate of 724,000, thanks to a surge in the South, the nation's biggest homebuilding area. Sales in the Midwest also climbed 3%, while those in the West and Northeast fell 1.4% and 22.2%, respectively. New home sales are seen as a timelier indicator of housing demand because they are calculated when contracts are signed. Existing home sales, on the other hand, are not tabulated until the transaction closes which could be weeks or months later. The approximate breakdown of residential housing transactions is 10% for new homes and 90% for those previously owned. The median sales price fell 7.5% to $403,600 thanks to greater activity at lower price points. Homebuilders are having a tough time moving inventory with the supply of new homes for sale at any stage of construction the highest since 2007. The number of completed homes awaiting purchase is at levels not seen since 2009 in the aftermath of the global financial crisis. Builders say suppliers have raised prices by about 6% in response to announced or enacted tariffs, suggesting that the surge in March may have been buyers rushing to buy before things got even more expensive.
The National Association of Realtors released data on existing home sales one day later. The news here was not as bright. Sales of previously owned homes fell in March by the most since 2022. Last month was the weakest March since 2009 and the figure of 4.02 million was below most estimates in a survey of economists conducted by Bloomberg. While volumes dropped, the median sales price rose 2.7% from a year ago to $403,700, a record for the month of March. With mortgage rates pushing 7% and tariffs poised to raise the price of everything from furniture to water heaters, buyers are being sidelined. The median price rose even though supply rose 19.8% from a year ago to a level not seen since March of 2020 when the pandemic first began to rage. The good news, for sellers at least, is that 21% of homes sold above the list price and properties remained on the market for 36 days on average last month, compared to 42 days in February.
What’s the main takeaway? Clearly, tariffs are on the mind of both new and existing home buyers and sellers. While it is too early to tell if the boost in new home sales was simply demand being pulled forward, as the calendar turns to the important spring selling months of April and May, investors will be keenly focused on the trends which emerge. Housing is a crucial industry in the country because with over 110 million households, it effects so many other industries from utility demand to school spending to the obvious do-it-yourself home repair stores. The key will be focusing on the labor market because people cannot afford homes without jobs. Applications for initial jobless claims rose by 6,000 to 222,000 in the week ending April 19 according to the Labor Department, in-line with estimates. In fact, new claims have been within 5,000 of the 220,000 mark for eight consecutive weeks reflecting a deer-in-the-headlight response from employers afraid to accelerate staff layoffs but also not confident to hire more. Next week we will receive the latest Jobs Openings and Labor Turnover Survey which is a favorite of the Fed due to the detail it provides. Stay tuned!
Company Events
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