Corpse-like Week in Review
Rates, oil, & more
A human composting facility, where cadavers are turned into nutrient-rich soil, just opened in Maryland. Speaking of decomposing corpses, mortgage rates jumped to a 9-month high this week, slamming the last metaphorical nail into the spring selling season’s coffin (or, you know, eco-friendly composting container).
Monday
NAHB Housing Market Index
Homebuilder confidence improved in May, but it’s still hovering at mid-2012 levels (not a great time for homebuilding, if you’ll recall). What’s interesting here is that the measure is unchanged from February, when mortgage rates briefly dipped below 6%. Regionally, homebuilders are most confident in the Midwest and least confident in the West.
Oil Stuff
As has been the case the past few weeks: the Strait of Hormuz is still closed and oil prices are still above $100/barrel.
Gas prices inched just barely lower to an average of $4.62/gallon (week ending May 18th), while diesel prices slipped to $5.60/gallon.
Why are gas prices flat while the Strait is still closed? We’ve released a stunning 31 million barrels of oil from the Strategic Petroleum Reserve since mid-April. That’s the fastest four-week drawdown ever, and the pace is increasing.
So for now, we’re padding the global oil supply with reserve releases, and that can last for another couple months.
TSA Checkpoint Travel Numbers
Air travel climbed just barely above year ago levels this week, an encouraging sign heading into the Memorial Day weekend.
Tuesday
Pending Home Sales
Pending home sales, which are supposed to show us what actual home sales will look like in a few months, rose modestly in April and are at the highest level since November. NAR chief economist Lawrence Yun notes that “Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate. All efforts need to be focused on boosting housing supply.” He’s not wrong.
