December 21, 2024

You are here: Home / Archives for association of realtors

Consumer Spending and Home Sales Were Up in May

June 27, 2013 by Leave a Comment

WASHINGTON — Americans spent more in May as their income rose, encouraging signs after a slow start to the year. But spending was weaker in April, February and January than previously estimated.

The Commerce Department said on Thursday that consumer spending rose 0.3 percent last month, nearly erasing a decline of similar size in April. Income rose 0.5 percent.

Consumers, benefiting from low inflation, spent more at retail businesses in May, notably for cars, home improvements and sporting goods.

In another bright spot, the number of people who signed contracts to buy homes in the United States jumped in May to the highest level in more than six years, a sign home sales will probably rise in the months ahead.

The National Association of Realtors said Thursday that its seasonally adjusted index for pending home sales rose 6.7 percent to 112.3 last month. That is the highest level since December 2006. Signed contracts have risen 12.1 percent in the last 12 months.

The increase could reflect an effort by potential buyers to complete deals before mortgage rates rise further. Mortgage rates rose in May and then jumped after the Federal Reserve chairman, Ben S. Bernanke, suggested last week that the Fed could slow its bond purchases later this year.

The increase points to healthy gains in home sales in the coming months. There is generally a one- to two-month lag between a signed contract and a completed sale.

The activity report should provide comfort as it shows that housing is still holding on, said Jennifer Lee, an economist at BMO Capital Markets.

Still, rising rates could weigh on demand later this year. The average rate on a 30-year mortgage soared this week to 4.46 percent, the highest in nearly two years, according to a report Thursday by the mortgage giant Freddie Mac. But rates are still low by historical standards.

“Despite the rise in mortgage rates and house prices, housing affordability will still be well above its long-term average,” said Joseph LaVorgna, an economist at Deutsche Bank.

Article source: http://www.nytimes.com/2013/06/28/business/economy/consumer-spending-and-home-sales-were-up-in-may.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Existing-Home Sales Rose in April

May 22, 2013 by Leave a Comment

The National Association of Realtors said on Wednesday existing home sales advanced 0.6 percent to an annual rate of 4.97 million units, the highest level since November 2009.

The data underscored the housing market’s improving fortunes as it starts to regain its lost glory. Resales were 9.7 percent higher than the same period last year.

“It’s quite supportive of the overall economy,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “It’s a cushion against some of the other concerns in the economy.”

Economic activity appears to have slowed somewhat early in the second quarter as the effects of higher taxes and deep government spending cuts started filtering through.

Manufacturing, in particular, has been showing strains, but housing has held up surprisingly well, with the gains in home values helping to boost consumer confidence and retail sales.

The ripples from housing’s recovery have also extended to the jobs market, where construction employment has been rising.

That should limit the degree to which the economy slows this quarter. It expanded at a 2.5 percent annual pace in the first three months of the year.

U.S. stocks were narrowly mixed in afternoon trading. Treasury debt prices were lower while the dollar was higher against a basket of currencies.

PRICES SOAR

Tight supplies in some parts of the country have constrained the pace of home sales, but sellers are starting to wade back into the market, attracted by rising prices.

In April, the median home sales price increased 11 percent from a year ago to $192,800, the highest level since August 2008. It was the fifth consecutive month of double-digit gains.

With prices rising, more sellers put their properties on the market. The inventory of homes on the market rose 11.9 percent from March to 2.16 million.

That represented a 5.2 months’ supply at April’s sales pace, up from 4.7 months in March. It remained, however, below the 6.0 months that is normally considered a good balance between supply and demand.

The market has been helped by monetary stimulus from the Federal Reserve that has kept mortgage rates near record lows. On Wednesday, Fed Chairman Ben Bernanke made clear he was not yet ready to retreat from the U.S. central bank’s monthly $85 billion asset purchase program.

Adding to signs that the housing recovery was becoming firmly established, distressed properties – which can weigh on prices because they typically sell at deep discounts – accounted for only 18 percent of sales last month.

That was the lowest since the Realtors group started monitoring them in October 2008. These properties, foreclosures and short sales, had made up 21 percent of sales in March.

In another bright sign, properties are selling faster. The median time on market for homes was 46 days in April, down from 62 days the prior month. That was the fewest days since the NAR started monitoring that number in May 2011. Before the market collapsed in 2006, it usually took about 90 days to sell a home.

“While there are clearly a lot of interested buyers out there snapping up homes at a rapid clip, there do not seem to be enough homes on the market,” said Omair Sharif, an economist at RBS in Stamford, Connecticut.

About 44 percent of all homes sold in April had been on the market for less than a month, while only 8 percent had been on the market for a year or longer.

Last month, first-time buyers accounted for 29 percent of the transactions, with investors buying 19 percent of homes. Investors, both individuals and institutions, are mostly buying homes for renting.

Sales were up in three of the four regions, falling 3.4 percent in the Midwest.

(Editing by Andrea Ricci)

Article source: http://www.nytimes.com/reuters/2013/05/22/business/22reuters-usa-economy-housing.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Stocks and Bonds: Stock Markets Recover Some Losses

December 30, 2011 by Leave a Comment

Better news on home sales and improved prospects for job growth sent stocks higher on Wall Street on Thursday.

The Dow Jones industrial average rose 136 points, nearly making up its 140-point loss from the day before. The Standard Poor’s 500-stock index edged back into the black for 2011, with just one day of trading left in the year.

The four-week average of unemployment claims fell to a three-and-a-half-year low, an indication that hiring could pick up. Also, the number of Americans who signed contracts to buy homes in November rose more than 7 percent to the highest level in a year and a half, according to the National Association of Realtors.

Quincy Krosby, Prudential Financial’s market strategist, said the reports were encouraging signals for the economy going in to 2012.

“The correlation between jobs and housing has been crystal-clear this year,” Ms. Krosby said. “Parts of the country where jobs are more plentiful are the ones where the housing market has held up.”

She said that the correlation became more pronounced after the real estate bust, when lenders became reluctant to even consider customers for a mortgage unless they held jobs.

For instance, Boston’s 1.1 percent drop in home prices since last year was one of the lowest among metro areas tracked by S. P./Case-Shiller index. The city’s unemployment rate is 6.2 percent, much lower than the national average of 8.6 percent.

The positive housing news sent the stocks of home builders sharply higher. Masco Corporation rose 8.4 percent and PulteGroup rose 6 percent.

The Dow closed at 12,287.04, a gain of 135.63 points, or 1.1 percent. For the year, the Dow is up 709 points, or 6 percent.

The S. P. 500 rose 13.38 points, or 1.07 percent, to 1,263.02. That is just six points above where the index started the year.

The Nasdaq composite rose 23.76 points, 0.92 percent, to 2,613.74.

Chesapeake Midstream Partners, a natural gas systems operator, rose 5 percent after it agreed to acquire Chesapeake Energy’s pipeline business.

Sears Holdings fell 1 percent two days after it said it was closing over 100 stores nationwide.

The euro fell to its lowest level against the dollar in more than a year and its lowest against the Japanese yen in a decade. The euro went as low as $1.28 versus the dollar, its weakest since September 2010.

Investors continued to be worried that Italy’s 10-year borrowing rate remained uncomfortably close to 7 percent, a level that economists consider unsustainable. Greece, Ireland and Portugal all had to seek relief from their creditors after their 10-year bond yields rose above 7 percent.

Italy paid 6.98 percent on a 10-year bond auction where it raised $3.3 billion. That was lower than the 7.56 percent it had to pay at an equivalent auction last month, but not low enough to assuage investors.

The Treasury’s 10-year note rose 6/32, to 100 29/32. The yield fell to 1.90 percent, from 1.92 percent late Wednesday.

Article source: http://feeds.nytimes.com/click.phdo?i=5ebef89fac5afe3608436749feecb98b

Filed Under: Economy News Tagged With: , ,

Home Sales Fall to 2011 Low; Few 1st-Time Buyers

June 21, 2011 by Leave a Comment

WASHINGTON (AP) — Fewer people bought previously occupied homes in May, lowering sales to their weakest point of the year.

Home sales sank 3.8 percent last month to a seasonally adjusted annual rate of 4.81 million homes, the National Association of Realtors said Tuesday. That’s far below the roughly 6 million annual sales rate typical in healthy housing markets.

Since the housing boom went bust in 2006, sales have fallen in four of the past five years. Analysts say they expect sales to level off at about 5 million a year. That’s not much better than the 4.91 million homes sold last year, the worst showing in 13 years.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

One sign of the housing industry’s struggles is that fewer first-time buyers are entering the market. The number of first-timers ticked down to 35 percent of sales last month. In healthy times, they drive about half of sales.

First-time buyers are critical because they tend to improve their properties and invest in their communities, a combination that raises home values. And their purchases allow sellers to move up to pricier homes.

Instead, the market has been saturated with foreclosures, which force prices down. Sales of homes at risk of foreclosure fell in May. But they still made up 31 percent of all purchases. And many pending foreclosures are backlogged in the courts or held up by state and federal probes into questionable foreclosure practices by lenders.

Until the glut of foreclosures are cleared and people think it’s a safe time to buy, “it is unlikely that home prices can recover on a sustained basis,” said Steven Wood, chief economist at Insight Economics.

Bigger required down payments, tougher lending rules, heavy credit-card and student-loan debt and a shortage of desirable starter homes are keeping many would-be buyers away. Even some who do have enough money for a down payment and a solid credit history are holding off, worried that home prices will keep falling.

Investors are filling some of the void. They are spending cash to scoop up deeply discounted homes in hard-hit areas of Phoenix, Las Vegas and Tampa. Last month, investors accounted for 19 percent of all sales.

All the while, previously occupied homes are cheap and in great supply.

Re-sold homes are a bargain compared with new homes. The median sales price for a previously occupied home in May was $166,500. The median price of a new home is nearly 31 percent higher than the price for a re-sale — around twice the normal markup.

The gap is largely due to the flood of foreclosures and short sales. (Short sales occur when lenders accept less than what’s owed on the mortgage.) A record 1 million homes were lost to foreclosures last year. And foreclosure tracker RealtyTrac Inc. expects 1.2 million more will be lost this year.

Another problem for the housing market is the glut of unsold homes. In May, the supply fell slightly to 3.72 million homes. At last month’s sales pace, it would take more than nine months to clear those homes.

Homes priced for less than $100,000 are selling briskly, but more expensive homes are having trouble finding buyers. Analysts say a healthy supply can be cleared in six months.

The situation is worse when taking into account the “shadow inventory” of homes, economists say. These are homes that are in the early stages of the foreclosure process but, because of backlogged courts or the government probes, haven’t hit the market for re-sale.

Sales fell across most regions in May. Sales dropped 6.4 percent in the Midwest, 5.1 percent in the South and 2.5 percent in the Northeast. There was no change in the West.

Article source: http://feeds.nytimes.com/click.phdo?i=955a8f6261b310ff43a8d0815a63bb8c

Filed Under: Business News Tagged With: , ,