Economy Watch: Congress Continues to Spin Its Wheels
Congress doesn't seem to be getting anywhere on the debt ceiling mess; foreclosures were down in the first half of the year, though perhaps due to blockage in the pipeline; and pending home sales were up in June.
By Dees Stribling, Contributing Editor
As of Friday morning, the House of Representatives hadn’t voted on the Republican plan to raise the debt ceiling–or rather, the part-of-the-Republican-Party plan, since some members of that very party in Congress clearly want nothing to do with it. This despite Speaker John Boehner’s main activity on Thursday, including deep into the night: the vigorous twisting of arms.
What now? Probably a lost weekend for members of Congress. Even if the speaker manages to push the bill to passage, “The Senate stands ready to defeat the Boehner plan whenever House Republicans can get their act together,” Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, wrote on Twitter on Thursday.
The U.S. Department of the Treasury said that plans remain unchanged for its three- and six-month securities auctions on Monday, which is when they usually happen. So far Treasury is mute about what happens after that if Congress hasn’t acted by next Tuesday.
Foreclosures down in first half of 2011
Though the debt-ceiling kerfuffle is the main distraction at the moment, there was other news about the U.S. economy on Thursday. For example, foreclosures in most major metro areas dropped during the first half of 2011, compared with the first six months of 2010, according to a report by RealtyTrac.
That sounds like a glimmer of good news, but according to RealtyTrac, these decreases mean that the foreclosure pipeline is clogged in many places. In some cases the blockage is because already-foreclosed properties aren’t selling, while in other cases a morass of inaccurately filed foreclosures is blocking new foreclosure filings. Or maybe some combo of both factors.
“Foreclosure activity continued to slow in the first half of 2011, especially in the most foreclosure-saturated markets and in markets where the judicial foreclosure process is used,” says James J. Saccacio, CEO of RealtyTrac noted in statement. “The 20 metro areas with the biggest year-over-year decreases in foreclosure activity were all in states with judicial foreclosure processes—New York, Maryland, Florida, New Jersey, Connecticut, Massachusetts and Illinois.”
Pending home sales up in June
According to the National Association of Realtors on Thursday, pending home sales increased in June following a large drop in April and then an uptick in May. The organization’s Pending Home Sales Index, which is a forward-looking indicator based on contract signings, rose 2.4 percent to 90.9 in June from 88.8 in May.
Moreover, the index is up from 75.0 in June 2010, but that’s a distorted comparison, since that was the first month after the expiration of the homebuyer tax credit. The always-optimistic Lawrence Yun, NAR chief economist, says in a statement that “two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” but he also took a jab at tight credit by mortgage lenders.
Wall Street was feeling better on Thursday for a while, perhaps believing debt-ceiling progress was being made, but late in the day stocks tumbled. The Dow Jones Industrial Average lost 62.44 points, or 0.51 percent, while the S&P 500 was down 0.32 percent. The Nasdaq eked out a minuscule 0.05 percent gain.