Signed contracts to purchase homes in December rose, Personal Consumer Spending, Gas Prices
January 30, 2017
Signed contracts to purchase homes in December rebounded from the previous month with solid increases in the South and West offsetting weakening activity in the Midwest and Northeast. The National Association of Realtors® (NAR) reported that Pending Home Sales in December rose 1.6% from November and above the 1.3% expected. The NAR said that potential home buyers shrugged off rising mortgage rates and limited housing inventory to sign home purchase contracts.
Consumers spent their hard-earned dollars in December on a variety of goods along with purchases of motor vehicles due in part to rising wages. The Commerce Department reported that Personal Spending grew by 0.5% in December, up from 0.2% in November. Personal Incomes increased by 0.3% last month and above the 0.1% recorded in November. Within the numbers it showed that the inflation gauge, the Core Personal Consumption Expenditures (PCE), fell to 0.1% from 0.2%, while the year-over-year Core PCE, the Federal Reserve’s favorite inflation number, came in at 1.7%, below the 2% level that the Fed is looking for.
Gas prices at the pumps fell in the latest week as oil prices stall after the recent increase. The national average price for a regular gallon of gasoline fell to $2.27 on Monday, January 30. That price is down from $2.32 a week ago, though well above the $1.80 seen last year this time. The highest recorded average was $4.11 back on July 17, 2008. The recent decline in demand coupled with a big supply, are key reasons for the drop in prices at the pumps. Experts see the price in gas continuing to decrease in the coming weeks and starting to edge higher in March and April.