Economic Update – New Home Sales See Uptick

By Dees Stribling, Contributing Editor Washington, D.C.–New single-family  home sales recorded an uptick in June, increasing 11 percent compared with May, to an annualized rate of 384,000, the Commerce Department said. It looks like a little pent-up demand for new homes is being unleashed, especially since prices are still falling. The Commerce Department also reported that the median price for a new house stood at $206,200 in June, down 12 percent from last June.An uptick, but how serious an uptick? When compared with June 2008, new housing sales were still down 21.3 percent, so the housing market has a ways to go before recovery sets in. Still, investors seem to be looking around for reasons to be cheerful about housing, since news of the uptick moved the Dow Jones U.S. Home Construction Index up 4.5 percent on Monday.First American CoreLogic, which tracks commercial mortgage data, had no such limited good news for the commercial real estate sector on Monday, reporting that roughly $165 billion in commercial real estate loans will mature by the end of 2009. That’s a lot of cans that need to be kicked down the road, and soon, with the problem being especially tricky for the loans that were bundled with other loans in CMBS back in the heyday of that vehicle in the mid-2000s.It might not be the best time to enter the retail world, but when you’re an 800-pound gorilla, you can elbow your way in. In any case, Microsoft has confirmed that it indeed has detailed plans for retail stores, which has been the subject of speculation for some time now. Somehow or other last Friday, a tech web site got ahold of PowerPoint slides illustrating various aspects of the retail concept, created by New York-based consulting firm Lippicott for the software giant. Microsoft duely acknowledged its efforts to enter the tech retail realm so ably occupied by Apple at the moment. But the company denied that the slides actually represented a final retail product. It also didn’t comment on exactly what form its version of the Apple Genius Bar would take, which will possibly be called the “Answer Bar,” “Guru Bar” or “Windows Bar,” or whether there will be a special room in which customers can vent frustration by hitting punching bags with Bill Gates’ mug on them. Federal Reserve chairman Ben Bernanke, who seems to be out on a campaign tour these days, might still be preaching caution about the state of the U.S. economy, but the governor of the Bank of Canada, Mark Carney, is decidedly more optimistic about his country’s economy. Late last week, Canada’s central banker asserted that the nation’s recession is virtually over. Carney has, in fact, predicted that Canada’s economy is going to start expanding during this quarter, earlier than previously anticipated. He forecast annualized growth of 1.3 percent in 3Q09. On the other hand, he also said that the recovery is going to be “a long road,” with no growth in jobs any time soon, adding that the bank plans to keep its benchmark interest rate at 0.25 percent, same as the Fed. Such statements may be part of an effort Carney has undertaking lately to talk down the Canadian dollar, since a too-strong loonie against the greenback is a recipe for poor exports to the United States, one of the linchpins of the Canadian economy that has already suffered because the U.S. recession. Wall Street had a busy day on Monday, mostly in negative territory, but by the time the final bell rang, the Dow Jones Industrial Average was up 15.27 points, or 0.17 percent. Gains by the S&P 500 and the Nasdaq were likewise scant: 0.3 percent and 0.1 percent respectively. –Nielsen Business Media