MetroIntelligence Economic Update by P. DUFFY
Pending existing home sales decline 3.9 percent in April and 9.1 percent year-on-year
Pending sales slid for the sixth consecutive month, down 3.9% in April from March. Pending sales rose in the Midwest and fell in the other three regions. Compared to the prior year, pending sales dropped for the eleventh consecutive month, with a 9.1% year-over-year drop and a decline in all regions.
Pending new home sales rise 2.0 percent in April, but down 3.1 percent year-on-year
The New Home Pending Sales Index (PSI) rose 2.0% month-over-month in April on a seasonally adjusted basis, capturing buyer urgency in a rising rate environment. The PSI is down 3.1% compared to last year and off 13.6% of cycle highs. The average sales rate per community input also fell, decreasing 3.5% year-over-year, as 80% of builders continue to limit sales given capacity constraints.
Federal Reserve meeting minutes for May summarize plans for rate hikes and reduction of balance sheet
The Federal Reserve Open Market Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipated that ongoing increases in the target range would be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1. Participants agreed that the economic outlook was highly uncertain and that policy decisions should be data dependent and focused on returning inflation to the Committee’s 2 percent goal while sustaining strong labor market conditions.