Home Sales Rise

Overview: Mortgage markets were volatile yet again over the past week, but rates ended with little change. It was a light week for economic reports, and the political headlines were the main driver of market movements.

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On Monday, President Donald Trump said that he was considering firing Federal Reserve Chair Jerome Powell. This caused uncertainty in financial markets and raised concerns about future inflation, resulting in a large selloff in bond and stock markets. However, Trump later said that he does not intend to remove Powell before the end on his term in May 2026. In addition, he indicated that he may be open to reducing tariffs on China, easing trade tensions. Mortgage rates and stocks reversed their movements from earlier in the week after these comments.

In March, new-home sales, which account for about 15% of the total housing market, rose 7% from February. This was well above the consensus forecast and marked the highest level since May 2023. With the latest gains, sales were 6% higher than a year ago. The median new-home price of $403,600 was down 8% from a year ago. The supply of new homes available for sale remained near the highest level since 2007. While existing-home sales measure actual closings during the month, new-home sales are based on contracts signed, making them a leading indicator of future housing market activity.

The latest news on home construction was less encouraging than the home sales data. Overall housing starts in March fell 11% from February, falling far short of the consensus forecast. Single-family starts dropped 14% to the lowest level since July 2024. Single-family building permits, a leading indicator of future construction, were down just slightly from February and close to expectations. A separate survey of home builder sentiment on housing market conditions from the National Association of Home Builders (NAHB) unexpectedly rose to 40, well above the consensus forecast of 37. Builders continued to cite uncertainty about tariffs and rising costs as the primary headwinds to future construction.

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New-Home Sales (thousands)

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Week Ahead

April 24

Existing-Home Sales

April 30

Q1 gross domestic product (GDP)

Personal Income and Outlays

Personal Consumption Expenditures (PCE) Price Index

May 2

Employment Report