Last week in my article and commentary about the economy and market, I mentioned that a number of reports and indicators were due to be published this week as part of the economic calendar. So, where are we at?
Existing Home Sales for March - this was the first report published this week (4/22) and it showed that existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.
The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.
However, here in the Northeast, existing-home sales in the rose 2.2 percent to an annual pace of 910,000 in March, but are 18.8 percent below March 2007. The median price in the Northeast was $284,300, up 4.6 percent from a year ago.
Durable Goods Orders – this was reported on Thursday 4/24 and revealed that total durable goods orders, according to a report released by the Department of Commerce, decreased 0.3% or $0.7 billion to $212.2 billion and represents a decrease for the third consecutive month. Excluding transportation, durable goods orders excluding transportation rose 1.5% despite calls for a 0.6% increase in March. This was somewhat of a surprise. Many economists and businesses expect that a rise in foreign demand will push up demand and help stimulate orders and manufacturing activity overall. Based upon this report, as well as other indicators, many economists say the economy is stabilizing and predict that the nation will avoid a recession.
New Home Sales - According to a report released this week, new single family home sales fell in March to a seasonally-adjusted annual rate of 526,000, which is 8.5-percent below the February sales rate (575,000 sales) and 36.6-percent below the March 2007 sales tally of 830,000 homes, according to a new report from the U.S. Census Bureau. The Northeast suffered the steepest drop of any region, of 19.4%, according to the report.
Jobless Claims – The market was surprised to hear that the Labor Department's reported this week that claims for unemployment benefits actually declined by 33,000 last week to 342,000. Economists had predicted claims would rise by 3,000 over last month’s number. This is good news.
Consumer Sentiment - The University of Michigan & Reuters consumer sentiment index, reported on Friday 4/25, dropped to 62.6 for April from 69.5 a month earlier. It was the lowest reading since the early 1980s as Americans struggle with rising energy, food prices, shrinking incomes and decreasing home values.
Existing Home Sales for March - this was the first report published this week (4/22) and it showed that existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.
The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.
However, here in the Northeast, existing-home sales in the rose 2.2 percent to an annual pace of 910,000 in March, but are 18.8 percent below March 2007. The median price in the Northeast was $284,300, up 4.6 percent from a year ago.
Durable Goods Orders – this was reported on Thursday 4/24 and revealed that total durable goods orders, according to a report released by the Department of Commerce, decreased 0.3% or $0.7 billion to $212.2 billion and represents a decrease for the third consecutive month. Excluding transportation, durable goods orders excluding transportation rose 1.5% despite calls for a 0.6% increase in March. This was somewhat of a surprise. Many economists and businesses expect that a rise in foreign demand will push up demand and help stimulate orders and manufacturing activity overall. Based upon this report, as well as other indicators, many economists say the economy is stabilizing and predict that the nation will avoid a recession.
New Home Sales - According to a report released this week, new single family home sales fell in March to a seasonally-adjusted annual rate of 526,000, which is 8.5-percent below the February sales rate (575,000 sales) and 36.6-percent below the March 2007 sales tally of 830,000 homes, according to a new report from the U.S. Census Bureau. The Northeast suffered the steepest drop of any region, of 19.4%, according to the report.
Jobless Claims – The market was surprised to hear that the Labor Department's reported this week that claims for unemployment benefits actually declined by 33,000 last week to 342,000. Economists had predicted claims would rise by 3,000 over last month’s number. This is good news.
Consumer Sentiment - The University of Michigan & Reuters consumer sentiment index, reported on Friday 4/25, dropped to 62.6 for April from 69.5 a month earlier. It was the lowest reading since the early 1980s as Americans struggle with rising energy, food prices, shrinking incomes and decreasing home values.
On another front, Treasury Secretary Henry Paulson said the government would begin sending out tax rebate checks to more than 8 million Americans starting April 28. The checks, which were originally scheduled for delivery in early May, will provide economic relief amounting to $600 to $1200 dollars per individual and are expected to create more than 500,000 jobs for in the economy. Paulson said approximately $50 billion will be sent out in May.
As I mentioned last week, expect that with seasonal adjustments, the housing numbers will increase in the months ahead. However, there will be short to intermediate term volatility. While we are not out of the woods yet, as I have said many times in the recent past, the economy will stabilize this year and begin a rebound later this year with good news on the economic and housing fronts being reported by year’s end, if not before that.
Please read the articles in this blog written by NAR’s Chief Economist Lawrence Yun to understand why a rebound in the economy and housing markets will take place and is not simply the stuff of wishful thinking.
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