5/28/2015
By Jennifer Coombs

Initial US jobless claims increased by 7,000 in the week of May 23^rd, but at 282,000, this is still quite low, as is the 4-week average which rose 5,000 to 271,500 and is trending about 10,000 lower than the-month ago comparison. Continuing jobless claims, increased by 11,000 in week of May 16^th, and are also very low at 2.222 million.

While the major equity indices are being dragged lower by broader macro data, there was another big check mark in favor of the housing sector. Pending home sales have consistently sent the most positive signal of any housing sector indictor. Up for the fourth month in a row, pending home sales increased by a very high 3.4% in April from an upwardly revised 1.2% (from 1.1%) in March. In particular, monthly gains were concentrated in the Northeast and Midwest regions, with the South and the West up slightly from the prior month. Below is a chart of the national and regional changes in the index over the past few months.

Pending home sales are up 14.0% over last year, which is a far ahead of the final sales of existing homes, up only about 6.1% over last year. It’s clear that issues involving consumer credit for closings don’t appear to be of major concern in the housing sector right now, and are probably not obstacles for gains in final sales. Overall it’s clear that reports on the housing sector are mixed, but some reports, especially this one, are extremely positive for the sector going into the summer selling season.

Jennifer Coombs
Wall Street Strategies

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