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Sales of Used Homes Dipped in March

April 22, 2013 by Leave a Comment

The National Association of Realtors said Monday that sales fell 0.6 percent to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February. The February figure was revised lower.

Still, sales in March were 10.3 percent higher than a year earlier.

Sales have remained mostly unchanged in the last four months — largely, analysts have said, because of a limited supply of homes. Economists still predict the housing market will continue to recover this year.

The low supply, combined with rising demand for housing, could accelerate construction in coming months. The Realtors’ group said buyer traffic was 25 percent higher than a year ago.

“A disappointing result for U.S. existing-home sales, but with inventories still very tight, the outlook remains favorable,” Jennifer H. Lee, an economist at BMO Capital Markets, said in a note to clients.

A steady housing recovery is providing support to the economy this year. Builders are starting work on more homes, increasing construction jobs. And home prices are rising. Higher prices tend to make homeowners feel wealthier and encourage more spending.

But the pace of purchases of used homes has been little changed in recent months, partly because of the tight inventory. The supply of available homes has fallen nearly 17 percent in the last year to 1.93 million.

At the current sales pace, that supply would be exhausted in 4.7 months, less than the six months typical in a healthy market.

The supply rose 1.6 percent from February to March. The Realtors’ group says it expects a much bigger increase in supply this month as the spring selling season began.

The tight supply helps explain rising prices. The median price rose 11.8 percent from February to March to $184,300, the biggest one-month gain since 2005.

The higher median price partly reflects bigger increases in sales of more expensive homes. Sales of homes priced from $500,000 to $750,000 jumped 25.3 percent from a year earlier. By contrast, sales of homes priced from $100,000 to $250,000 rose just 7.1 percent.

First-time buyers, who usually drive housing recoveries, are playing a smaller role in the current rebound. They accounted for 30 percent of sales last month, the same as in February. First-time buyers usually make up about 40 percent of buyers in a healthy market.

One bright sign in the report is that the percentage of so-called distressed sales fell sharply. Distressed sales include foreclosed homes and homes in which the size of the mortgage exceeds the value of the home.

Those sales fell to 21 percent of the total in March, down from 25 percent in February. That is the lowest proportion since the Realtors’ group began tracking the figure in October 2008.

Steady hiring and near-record-low mortgage rates have helped increase sales.

Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments. Those changes have left many would-be buyers unable to qualify for very low mortgage rates.

Mortgage rates dropped last week to near-record lows. The average rate for a 30-year fixed mortgage dropped to 3.41 percent from 3.43 percent. That is not far from the record low of 3.31 percent last November.

Article source: http://www.nytimes.com/2013/04/23/business/economy/sales-of-used-homes-dipped-in-march.html?partner=rss&emc=rss

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Sales of Existing Homes Hit a 3-Year High

March 22, 2013 by Leave a Comment

The association said sales increased 0.8 percent to an annual rate of 4.98 million units last month, the highest level since November 2009. The January sales rate was revised up to 4.94 million units from the previously reported 4.92 million units.

Economists polled by Reuters had expected sales to rise to a five-million-unit rate. Homes took about 74 days to sell in February, according to the median estimate, down from 97 days a year ago.

In another report, the Labor Department said the number of Americans seeking unemployment aid barely changed last week, while the average over the last month fell to a five-year low. The decline in layoffs is helping to strengthen the job market.

Weekly unemployment benefit applications rose just 2,000 to a seasonally adjusted 336,000, the department said.

Over the last four weeks, the average number of applications has dropped by 7,500, to 339,750. That is the lowest level since February 2008, just three months into the recession.

In a third economic report, the Philadelphia Federal Reserve Bank said its business activity index rose to 2 from minus 12.5 in February, topping economists’ expectations for minus 2.

Any reading above zero indicates expansion in the region’s manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware. Before March’s gain, the index had contracted in three of the last four months.

New orders rose to 0.5 from minus 7.8, while inventories rose to zero from minus 10. The gauge of the number of employees gained to 2.7 from 0.9, but the average employee workweek dropped to minus 12.9 from minus 1.6.

The survey is seen as one of the first monthly indicators of the health of manufacturing in the nation. Survey respondents’ view on the coming months perked up slightly with the gauge of business conditions for the next six months rising to 32.5, from 32.1.

The rise in home sales last month was the latest indication that the housing market was gaining more ground. Data this week showed builders broke ground on more houses in February and permits for future construction approached a five-year high.

“With buying conditions remaining very supportive to demand and overall economic fundamentals continuing to improve, we expect the momentum in housing activity to improve further, providing a supportive backdrop for the recovery more generally,” said Millan Mulraine, a senior economist at TD Securities in New York.

The Federal Reserve’s monetary policy, holding mortgage rates near record lows, is helping to lift the housing market and bolster the economy.

Last month, the inventory of unsold homes on the market increased 9.6 percent to 1.94 million. That represented a 4.7 months’ supply at February’s sales rate, up from 4.3 months in January, the first increase since April. Inventories typically rise in February.

Still, the months’ supply remained below the six-month level that is normally considered a healthy balance of supply and demand.

Since surging in August, home resales have increased only modestly, an indication that tight supplies in some parts of the country are constraining sales.

The median home sales price in February rose 11.6 percent from a year ago, to $173,6000.

Article source: http://www.nytimes.com/2013/03/22/business/economy/claims-for-jobless-benefits-inch-higher.html?partner=rss&emc=rss

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Economy Contracted Unexpectedly in Fourth Quarter

January 30, 2013 by Leave a Comment

The drop in gross domestic product was driven by a plunge in military spending, as well as fewer exports and a steep slowdown in the buildup of inventories by businesses. Anxieties about the fiscal impasse in Washington also contributed to the slowdown, one reason stockpiles grew more slowly.

Despite the overall contraction, there was underlying data in the report suggesting the economy is not on the brink of a recession or an extended slump. Residential investment jumped 15.3 percent, a sign that the housing sector continues to recover, for one. Similarly, investment in equipment and software by businesses rose 12.4 percent, an indicator that companies are still spending. Although economists expected output to decline substantially from the 3.1 percent annual growth rate recorded in the third quarter, the negative number still caught Wall Street off-guard. It was the weakest economic report since the second quarter of 2009.

“I’m a little surprised,” said Michael Feroli, chief United States economist at JPMorgan. “It grabs your attention when you have a negative number across everyone’s screens.”

Stocks were down only slightly in early trading on Wall Street, as some traders shrugged off the unexpected drop.

Mr. Feroli had been expecting growth to come in at 0.4 percent, which was well below the 1.1 percent consensus among economists on Wall Street. Like some other observers, Mr. Feroli said there were hints the economy was performing slightly better than the headline number suggested.

The 22.2 percent drop in military spending – the sharpest quarterly drop in more than four decades – along with the drop in inventories and exports overwhelmed more positive indicators in the private sector, he said.

For example, final sales to private domestic purchasers, which strips out government spending as well as trade and inventories, rose by 2.8 percent. “Consumers and businesses kept spending at a pretty steady pace,” Mr. Feroli said. “There was a lot of noise that moved the headline around.” For the entire year, the economy grew by 2.2 percent, a slight improvement from the 1.8 percent annual rate in 2011.

But with unemployment stubbornly high at 7.8 percent and growth expected to remain slow in the first quarter, the poor report Wednesday was likely to set off more finger-pointing in Washington.

The compromise between President Obama and Congress earlier this month allowed a temporary cut in Social Security taxes to expire, which is expected to crimp growth in the first quarter. The change will cost a worker earning $50,000 a year an extra $1,000 annually.

Indeed, a consumer confidence survey released Tuesday by the Conference Board showed a sharp downturn in January, which economists attributed in part to financial anxiety arising from the reduction in take-home pay.

The consensus estimate for early 2013 is currently calling for output to rise at an annual rate of 1.5 percent, but that number may come down in the wake of Wednesday’s report.

This was the Commerce Department’s first estimate of fourth-quarter growth; revisions are due in February and March, so the final figure could go up or down significantly.

Article source: http://www.nytimes.com/2013/01/31/business/economy/us-economy-unexpectedly-contracted-in-fourth-quarter.html?partner=rss&emc=rss

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October Home Prices Rose In Positive Sign for Markets

December 27, 2012 by Leave a Comment

WASHINGTON (AP) — Home prices were up in most major metropolitan areas in October from a year earlier, pushed up by rising sales and a decline in the supply of available homes. Higher prices show the housing market is improving as it moves into the slow fall and winter sales period.

The Standard Poor’s/Case-Shiller national home price index released Wednesday showed that prices increased 4.3 percent from October 2011, the largest year-over-year increase in two and a half years, when a home buyer tax credit temporarily increased sales.

Prices rose in October 2012 from a year earlier in 18 of 20 cities. Phoenix led all cities with a 21.7 percent gain, followed by Detroit, where prices increased 10 percent. Prices declined in Chicago and New York.

Home prices fell in 12 of 20 cities in October compared with September. Monthly prices are not seasonally adjusted, so the decreases reflect the end of the peak buying season.

Still, the broader trend is encouraging. October was the fifth straight month of year-over-year gains, after nearly two years of declines. Prices rose in mid-2010 in the final months before the tax credit expired. They had fallen sharply in 2008 and 2009.

“It is clear that the housing recovery is gaining strength,” said David M. Blitzer, chairman of the index committee at SP Dow Jones Indexes.

The improvement in housing is adding to economic growth and most analysts expect that to continue in 2013, assuming that the White House and Congress can reach a deal to avert economic damage from sharp tax increases and government spending cuts set to take effect on Jan. 1.

“We expect home price appreciation to continue for the foreseeable future, because inventories are lean amid rising sales,” said Joseph LaVorgna, chief United States economist at Deutsche Bank. “This assumes that a resolution to the fiscal cliff is found,” he said. “Otherwise, the recent positive trend in housing would most certainly be in jeopardy along with the rest of the current economic expansion.”

Prices nationwide have recovered to about the same level as in the fall of 2003, according to the Case-Shiller index. They remain about 30 percent below the peak reached in the summer of 2006.

The pace of home construction slipped in November but was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the largest number of homes in four years.

Builder confidence rose in December for a seventh straight month to the highest level in more than 6 1/2 years, according to a survey released last week by the National Association of Home Builders/Wells Fargo.

Article source: http://www.nytimes.com/2012/12/27/business/economy/home-price-index-rose-in-october.html?partner=rss&emc=rss

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Off the Charts: Industrial Production Sags, and Even Germany Is Affected

November 17, 2012 by Leave a Comment

Figures reported this week showed that industrial production in the euro zone fell 2.5 percent in September from the previous month, the largest monthly decline since January 2009, during the worst part of the credit crisis. Production in Germany was off 2.1 percent.

Although the figures are seasonally adjusted, they can be volatile. But the longer-term trend was poor even before the September figures came in.

The accompanying charts show year-to-year changes in industrial production, using three-month moving averages to smooth out some volatility, among advanced economies as a group, in the euro zone and five major countries.

The Dutch government compiles industrial production figures from around the world. In August, the total for advanced economies was lower than it had been a year earlier, something that had not happened since 2009, although the three-month average, as shown in the chart, remained a little higher.

The September figures for some countries will not be out until the end of this month, but it seems likely they will show a drop as well.

“Germany has slowed because weak global demand, particularly for the major machinery that Germany exports, is creating lower demand for Germany’s exports,” wrote Greg Jensen of Bridgewater Associates, a hedge fund and advisory firm. He said German companies were accumulating large inventories and their profits were suffering.

There are exceptions to the world pattern. Chinese industrial production continues to rise at a rate of more than 9 percent a year. While that is down from last year, it remains good. On Friday, the Federal Reserve reported that industrial production in the United States slipped in October by 0.4 percent, the second decline in the last three months, although the Fed said it would have been close to unchanged but for the effects of Hurricane Sandy. The annual growth rate is down to less than 3 percent.

But the declines have spread to some developing countries. Brazil’s production is running about 3 percent below that of a year earlier, and Indian production is basically flat compared with a year earlier.

It is not clear how much of the weakness in industrial production represents a real weakening of demand and how much reflects inventory issues. During the credit crisis, production fell much more rapidly than final demand, as companies found it hard to get financing and worried that their customers would be unable to pay for what was being shipped. Much of the revival in 2010 reflected pent-up demand, and some of the current slowing may simply show that depleted inventories have been replenished.

But the declines also provide an indication of continuing problems, particularly in some of the European countries most in need of a growing economy.

Greece’s industrial production was never large to begin with, but it is now lower than at any time since the figures began to be compiled in 1995, and is down about a third from its peak, set back in 2000.

Italian production appeared to recover in line with that of other countries in 2010, but has since weakened appreciably. For much of this year, it has been down more than 6 percent from the previous year. Spain’s production has fallen almost as rapidly.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2012/11/17/business/economy/industrial-production-sags-and-even-germany-is-affected.html?partner=rss&emc=rss

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Inventories Barely Grew in November

January 11, 2012 by Leave a Comment
Opinion »

Borderlines: Where is Europe?

As both a concept and a continent, the area known as Europe has changed over time.

Article source: http://feeds.nytimes.com/click.phdo?i=568f9764c53136411fb9d92212e28cb7

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New Jobless Claims Are Lowest Since ‘08

December 22, 2011 by Leave a Comment

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 364,000, the Labor Department said on Thursday. That was the lowest amount since April 2008.

In other economic news, a survey released Thursday showed that consumer sentiment rose in December to its highest level in six months. And a gauge of future economic activity increased more than expected in November because of a sharp pickup in new permits to build homes.

But revised data showed that the nation’s economic growth was slower than previously estimated in the third quarter because of a sharp drop in health care spending. Stronger business investment and a fall in inventories pointed to a pickup in output in the current period.

The United States economy has shown signs it is gaining steam as the year ends, although the recovery still could be derailed by any big flare-up in Europe’s debt crisis. The economy also faces risks from the fight in Congress over extending special unemployment benefits and a payroll tax cut.

Jobless Claims

The decline in jobless claims last week was a more positive development than expected. Economists polled by Reuters had forecast claims rising to 375,000 last week.

The prior week’s jobless claims data was revised up to 368,000 from the previously reported 366,000.

The level of unemployment claims has fallen in recent weeks, and analysts say fewer layoffs means employers are probably more likely to hire.

Economists at Goldman Sachs said earlier in the week that weekly claims below 435,000 pointed to net monthly gains in jobs. Their research was based on figures available through October.

In November, the jobless rate dropped to a two-and-a-half-year low of 8.6 percent. The Federal Reserve last week acknowledged an improvement in the jobs market, but said unemployment remained high and left the door open for further measures to help the economy.

Consumer Sentiment

In a fresh sign of economic hope, a survey released Thursday showed that Thomson Reuters University of Michigan’s final reading on the overall index on consumer sentiment rose to 69.9 points in December from 64.1 the previous month.

It topped the median forecast of 68 points among economists polled by Reuters and beat December’s preliminary figure of 67.7.

Over all, real spending is expected to increase by 1.8 percent in 2012 as long as action is taken on extending the payroll tax cut, the survey said.

The survey’s barometer of current economic conditions rose to 79.6 points from 77.6, while the survey’s gauge of consumer expectations gained to 63.6 points from 55.4. All three indexes were at their highest level since June.

“I think it’s a reflection of improving job statistics, we’re seeing an increase in retail sales and even housing seems to be going up,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “A lot of the key bookends of our economy appear to be really strengthening and that’s supporting confidence.”

Leading Indicators

A report released Thursday by the Conference Board suggested that economic momentum could increase by spring.

The private firm’s Leading Economic Index rose 0.5 percent in November to 118 points, following a 0.9 percent increase in October. It was the seventh straight monthly gain in the index.

“The risk of an economic downturn in the near term has receded,” said Ataman Ozyildirim, an economist at the Conference Board.

Ken Goldstein, another Conference Board economist, said the index suggested the economy could pick up steam by spring.

Analysts polled by Reuters had expected the index to rise 0.3 percent in November.

Economic Output

In a separate report released on Thursday, the Commerce Department said in its final estimate that gross domestic product grew at a 1.8 percent annual rate in the July-September quarter, down from the previously estimated 2 percent.

Economists had expected growth to be unrevised at 2 percent. Though spending on health care dropped by $2.2 billion, spending on durable goods was stronger than previously estimated, indicating household appetite to consume remains healthy.

Health care spending had previously been reported to have increased at a $19.7 billion rate. Health care spending subtracted about 0.1 percentage point from the G.D.P. change in the final revision, whereas the previous estimate had it adding 0.61 percentage point to growth.

Despite the downward revision, the third quarter growth is still a step up from the April-June period’s 1.3 percent pace. Part of the pickup in output during the last quarter reflected a reversal of factors that held back growth earlier in the year.

A jump in gasoline prices weighed on consumer spending earlier in the year, and supply disruptions from Japan’s big earthquake and tsunami in March curbed auto production.

The government revised consumer spending to a 1.7 percent growth rate from 2.3 percent because of adjustments to health care services, in particular nonprofit hospitals.

Spending on durable goods was, however, revised up to a 5.7 percent pace from 5.5 percent.

Business inventories dropped by $2 billion, which sliced off 1.35 percentage points from G.D.P. growth. Inventories had previously been estimated to have declined $8.5 billion.

The drag from inventories was offset by strong business spending, which increased at a 15.7 percent rate, instead of 14.8 percent.

Article source: http://feeds.nytimes.com/click.phdo?i=b043ce80eb59335e8618bf879b992e1f

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Orders for Capital Goods Rose the Most in 3 Months

October 5, 2011 by Leave a Comment

Bookings for goods like computers and communications equipment, excluding military hardware and aircraft, climbed 0.9 percent, the most since May, the report said. Demand for all factory goods declined 0.2 percent.

Faster growth in emerging economies helped sustain demand for American-made turbines and equipment even as households cut back.

Economists projected no change in total factory orders after a 2.1 percent increase, according to the median forecast of 68 economists in a Bloomberg News survey. Estimates ranged from a 1 percent drop to a 2.2 percent increase.

Industrial machinery, computers, aircraft and communications equipment bookings climbed in August, while orders for motor vehicles decreased, the report showed.

Orders for nonmilitary capital goods excluding aircraft, a proxy for future business investment, increased after a revised 0.3 percent decrease in July.

Shipments of those items, used in calculating gross domestic product, increased 2.8 percent in August, the most in five months, after rising a revised 0.3 percent the previous month.

The report reflected a drop in orders at vehicle makers after supply disruptions caused by the earthquake in Japan in March. Bookings for motor vehicles and parts decreased 5.3 percent after the previous month’s 8.5 percent surge.

Even so, auto purchases picked up last month. General Motors, Chrysler, Ford and Nissan said Monday their sales rose more than estimated.

Orders for commercial airplanes rose 24 percent in August after surging 50 percent in July.

Demand for durable goods, which make up just more than half of total factory demand, fell 0.1 percent, the report showed.

Bookings of nondurable goods dropped 0.3 percent, reflecting a decrease in the value of petroleum products.

Factory inventories rose 0.4 percent in August, and manufacturers had enough goods on hand to last 1.34 months at the current sales pace, compared with 1.33 months in July.

Article source: http://feeds.nytimes.com/click.phdo?i=b3ac0aa3597591ff038b2319b07f47df

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Sales of New Homes in U.S. Fell Again in July

August 23, 2011 by Leave a Comment

The housing market is showing little sign of recovery, with sales of new homes in the United States down again in July, according to the latest government data.

Sales of new homes reached an annual rate of 298,000 in July, down from a rate in June that was revised to 300,000 from 312,000, the Census Bureau report said. The July figures fell short of analysts’ expectations for a rate of 310,000.

The median sales price of a new home was $222,000 in July, also down from the previous month. The stock of new homes for sale at the end of July was 165,000, the lowest this year, and would last slightly more than six months at the current sales rate.

For months, most indicators of the housing market have been suggesting bleak conditions. The number of permits issued to builders of single-family houses has also been declining.

Patrick Newport, United States economist for IHS Global Insight, said that his firm has forecast new-home sales will fall to a record low this year, 319,000 compared with 321,000 in 2010.

“It has gotten worse for builders,” said Mr. Newport. “They are stuck in a market where they cannot sell new homes.”

In addition, demand for new homes is stagnant despite record low mortgage interest rates, and competition from foreclosures continues to cloud the sector, said Joshua Shapiro, chief United States economist at MFR Inc.

“This suggests that prices will continue to edge lower at the bottom end of the market even as demand for these homes picks up a bit,” Mr. Shapiro said.

The sales rate in July came close to the record low of 281,000 in February, and the level of inventories in recent months this year has been the lowest recorded since December 1967, he wrote in a research note.

“We are just bouncing along the bottom,” Mr. Shapiro said in a telephone interview. “There is no indication out there that anything is improving. It is bouncing along at historic lows at this point.”

Economists say that it would take a turnaround in the American job market for some of the vitality to return to the housing sector.

“We need job growth but in conjunction with that, housing prices have got to stop dropping,” Mr. Newport said.

Still, one analyst said that the market was showing the potential to recover in the years ahead despite weakness in the monthly data. The analyst, Russell Price, a senior economist with Ameriprise Financial, noted that median and average prices were higher in July on a year-over-year basis.

“Generally we are forming a base in the housing sector this year,” he said. “On aggregate, I think that conditions are solidifying at historically low levels. We are unlikely to go any further down.

“As the economy does recover, and you get less competition from foreclosure sales, the market is poised for a relatively solid rebound in the years ahead,” Mr. Price said.

Article source: http://feeds.nytimes.com/click.phdo?i=9937fa1f695cf2425f5eca3e2ec3c4dd

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