ARE COSTLIER MORTGAGES IMPACTING HOME SALES?
On Friday, the Census Bureau announced an unexpected 13.4% drop in new home purchases for July. In contrast to that news, the National Association of Realtors stated that existing home sales rose 6.5% last month. So what is the takeaway here? Most new home purchase contracts close months in the future, and many buyers of existing homes may have locked in the rates of home loans in spring. Is the dip in new home buying a direct, alarming reflection of the recent jump in mortgage rates? Will it give the Federal Reserve pause about tapering?
LEADING INDICATORS RISE IN JULY
The 0.6% increase in the Conference Board Leading Economic Index was a nice change after its flat June reading. The LEI now stands at 96.0, edging closer to its original mark of 100. From February to July, it rose 2.0%; in the preceding six months, it rose 1.1%.
GOLD CLIMBS BACK TOWARD $1,400
Friday’s COMEX settlement price was the highest since June: $1,395.80 per ounce. The troubling news about new home sales may have had an effect. NYMEX crude also gained $1.39 Friday, settling at $106.42.
STOCKS REGAIN SOME MOMENTUM
Last week saw two unusual occurrences in the financial world: a three-hour trading interruption for the NASDAQ on Thursday, and a Federal Reserve symposium in Jackson Hole, WY without the presence of Ben Bernanke. The S&P 500 rose 0.46% in five days to settle at 1,663.50 Friday. The NASDAQ also advanced; its 1.52% weekly rise brought it to 3,657.79 at week’s end. As for the Dow, it declined 0.47% across five days to 15,010.51.
THIS WEEK: Monday brings the July durable goods orders report from the Census Bureau. The June S&P/Case-Shiller Home Price Index and the Conference Board’s August consumer confidence poll both arrive Tuesday. Wednesday, the National Association of Realtors provides numbers on July pending home sales. The second estimate of Q2 GDP appears Thursday, courtesy of the Bureau of Economic Analysis; the latest initial jobless claims figures also become available. On Friday, August ends with the month’s final consumer sentiment index from the University of Michigan and the Commerce Department’s report on July consumer spending.
About the Independent Financial Advisor
Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.