Economic Insights - August 21, 2023
The economic landscape on August 21, 2023, reflects a blend of positive indicators and potential causes for caution. Interest rates are currently on an upward trajectory, a trend likely to persist in the near term due to the response of Treasury rates to the consistent strength observed in underlying economic data. Amidst this, the housing market presents both hopeful prospects and potential headwinds.
New home sales and residential construction showcase promise, potentially serving as drivers to fortify the overall economy. Simultaneously, consumer spending, a vital pillar of economic growth, displays resilience in the face of various challenges that might have suggested a slowdown in retail sales. These collective signals could indicate that the Federal Reserve is moving closer to achieving a desirable soft landing. However, it's prudent to exercise cautiousness, as the leading economic index implies a need to temper our outlook.
Consumer Activity in July
The surprise surge in consumer activity during July is notable. Despite mounting credit card utilization and a decline in savings to pre-pandemic levels, consumers delivered an unexpected boost to retail sales, surpassing expectations. The broader retail sales saw a 0.7% increase last month, a figure well above initial forecasts. If we exclude auto sales, the gains are even more pronounced. After accounting for inflation adjustments, the economy recorded a robust growth figure following positive revisions to previous data.
While businesses contributed to propelling economic progress during the second quarter, consumers, as the largest driving force of the economy, present optimistic data that could potentially help stave off a recession during the third quarter.
Shift in the Housing Market Landscape
A shift in the housing market landscape is evident, with new home sales gaining prominence within the overall market share. The impact of rising interest rates and limited inventory on existing home sales has led to a notable increase in new home sales as a percentage of the market. Nationally, close to 16% of single-family home sales were related to new construction in July, marking a significant rise from the 11% reported in April 2022.
Homebuilders are offering incentives like rate buydowns to entice potential buyers, contributing to this trend. However, even as existing home sales exhibit recent growth, the market share of new homes is showing signs of stabilizing.
Down Payment Assistance Programs
On the topic of Down Payment Assistance Programs, resources are limited, warranting a proactive approach for those considering home purchases in the near term, within six months or less. The provided link directs you to access these programs to ascertain your eligibility and explore the available options.
The process involves locating the down payment connect button, often found on listing images, to access homebuyer programs in your region. Inputting your household information, will allow you to tailor your search and identify applicable programs matching your household characteristics. The results will reveal the number of programs available to you and the potential assistance amount. A comprehensive report can be requested to obtain detailed information.
When ready to initiate your search, a visit to Down Payment Assistance qualified homes available to purchase DPA qualified Homes or following the prompts from your selected property can guide you through the process. Notably, not all homes qualify for Down Payment Assistance, and properties meeting these requirements are indicated by a GREEN Dollar sign and GREEN check mark on the listing's top right-hand corner. Flexibility in adjusting parameters can help align the search with your specific needs.
Your journey towards achieving homeownership goals is a prospect I eagerly anticipate assisting you with.
Access Down Payment Assistance Programs