Senate Leader Rejects Parts of President’s Budget Proposal, Existing Home Sales Down In February
March 22, 2017
Senate Majority Leader Mitch McConnell (R-KY) rejected parts of President Trump’s budget proposal on Tuesday; Existing home sales retreated 3.7% to an annualized pace of 5.48 million units in February, down from 5.69 million units in January; The Federal Housing Finance Agency’s (FHFA) monthly house price index continued its upward trajectory in January; U.S. crude oil inventories surged by 5.0 million barrels last week as total crude reserves stood at 533.1 million barrels, meaningfully above the upper limit of the average range for this time of year.
- Senate Majority Leader Mitch McConnell (R-KY) rejected parts of President Trump’s budget proposal on Tuesday, taking aim at plans to cut foreign aid and medical research while wavering on his support for the Republican replacement to the Affordable Care Act. The Republican leader also attacked the Trump administration’s proposals to bolster the nation’s military, stating that “America being a force is a lot more than building up the Defense Department” and continued to criticize the White House’s cuts to the State Department. Sen. McConnell was confident in his rhetoric that the ACA replacement bill would make it through the House to his chamber, though he also said it would require meaningful changes to garner the 60 votes required to prevent filibuster from the Democrats. Indeed, McConnell lacks votes from even within his own party in supporting the bill, including fellow Kentuckian Rand Paul and Sen. Mike Lee (R-UT). The majority leader emphasized that it is an ongoing “learning process” for Republicans in their to return governing after years as the opposition party. [ABC News]
Economic Indicators & News
- Existing home sales retreated 3.7% to an annualized pace of 5.48 million units in February, down from 5.69 million units in January, due to supply constraints and weakening affordability conditions stifled buyer activity in all geographies. Realtors have reported stronger foot traffic, though newly listed properties are being sold quickly leaving behind minimal choices for inelastic segments of the housing market. The median existing-home sales price was $228,400 in February, up 7.7% on the year, in the fastest increase since last January and the 60th consecutive month of year-over-year gains. Total housing inventory rose 4.2% to 1.75 million existing homes available for sale, but is still down 6.4% below February 2016 levels. First-time buyers were 32% of sales in February, 1% lower than the prior month. Market consensus was for an annualized sales pace of 5.55 million units last month. [Realtor]
- The Federal Housing Finance Agency’s (FHFA) monthly house price index continued its upward trajectory in January, as home prices were up 5.7% from the year ago period, though they were sequentially flat from December after a 0.4% monthly rise. Price growth by was positive across all geographies over the 12-month period, ranging from +3.5% in the East South Central division representing Kentucky, Tennessee, Mississippi, and Alabama to +8.3% in the Mountain division encompassing Montana, Idaho, Wyoming, Colorado, and Arizona. Sequentially, prices were down 2.0% in the East South Central Region as the highest monthly growth was in the Pacific region, at +0.6%. The market consensus was for 0.5% sequential growth in house prices. [FHFA]
- U.S. crude oil inventories surged by 5.0 million barrels last week as total crude reserves stood at 533.1 million barrels, meaningfully above the upper limit of the average range for this time of year, as American petroleum imports were up by 902,000 million barrels to 8.3 million barrels per day. Petroleum refinery inputs rose by 329,000 barrels per day to 15.8 million as refineries operated at 87.4% of their available capacity. Gasoline production increased last week to average 9.8 million barrels per day while distillate fuel production rose to 4.8 million barrels per day. Total product supplied to end users moved higher by 0.5% over the year ago period to 19.8 million barrels per day. Motor gasoline supplied dropped 2.9% over the same period last year. [EIA]