Economic data mixed
Several government reports are providing mixed signals about the prospects for economic recovery.
The National Association of Realtors’ seasonally adjusted index of pending sales rose by 0.1 point to 90.7 in May, the fourth straight month of increases, the Associated Press reported. According to the organization, the increase is due to lower home prices and the $8,000 first-time homebuyer tax credit.
However, the Commerce Department said today that construction spending fell 0.9 percent in May after a 0.6 percent rise in April. Residential construction was down 3.4 percent after holding steady in April, while spending on private home building plummeted 33.9 percent from the year-ago period. Meanwhile, nonresidential construction rose 0.5 percent, with spending on transportation, power projects and manufacturing all increasing.
U.S. mortgage applications fell to a seven-month low last week, another sign that the U.S. housing market may not be improving yet, Reuters reported. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications fell 18.9 percent to 444.8 for the week ended June 26, the lowest reading since the week ended Nov. 21.
Refinancings accounted for 46.4 percent of applications, down from 54 percent the previous week and much lower than the peak of 85.3 percent in the week ended January 9 as mortgage rates have risen from an all-time low of 4.61 percent set in the week ended March 27. A 30-year fixed-rate mortgage averaged 5.34 percent last week.
Meanwhile, the Institute for Supply Management’s manufacturing index was 44.8 in June, up from 42.8 in May, a sign that the sector is contracting at a slower pace, the Associated Press reported. A reading below 50 indicates contraction.