Economy Watch: Foreclosures Not Spiking Just Yet
A tide of foreclosures in the wake of the robo-signing settlement is now conventional wisdom among economists and others who track the drab state of the housing, but according to the latest numbers from RealtyTrac, the tide isn't rising quite yet.
By Dees Stribling, Contributing Editor
A tide of foreclosures in the wake of the robo-signing settlement is now conventional wisdom among economists and others who track the drab state of the housing, but according to the latest numbers from RealtyTrac, the tide isn’t rising quite yet. That doesn’t mean the conventional wisdom is wrong, just that the foreclosure machine is going to take a little time to gear up again nationwide. It’s the nature of the beast: Even long-delayed foreclosures are slow to re-start.
On Thursday, Realty Trac reported that foreclosure filings—by which the company means default notices, scheduled auctions and actual bank repossessions—were reported on 206,900 U.S. properties in February, a 2 percent month-over-month drop. The total was also down 8 percent compared with February 2011, which was the steepest annual drop since October 2010. Robo-signing clearly retarded the pace of foreclosures during the last 12 months.
But now that’s over. “February’s numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed,” Brandon Moore, CEO of RealtyTrac, noted in a press statement. “Although national foreclosure activity was pushed lower by decreases in a handful of larger states, 21 states posted annual increases in foreclosure activity.”
Wholesale prices rise, especially energy
Foreclosures might have edged down, but there have been spikes in other economic indicators lately. The Bureau of Labor Statistics said on Thursday that the Producer Price Index for finished goods jumped 0.4 percent in February compared with a modest rise of 0.1 percent in January. Intermediate goods moved up 0.7 percent and crude goods prices increased 0.4 percent.
The culprit in this incipient inflation? Energy, naturally, up 1.3 percent on a month-over-month basis, compared with a 0.1 percent decline in the wholesale price of food. A 4.3 percent spike in the gasoline index accounted for most of the energy increase, but advances in residential electric power and home heating oil costs also contributed to the rise in finished energy prices.
The recent wholesale increases in the cost of gas are showing up at the pump, too. AAA reported on Thursday that the national average for regular was $3.82 per gallon, up from $3.76 a week ago, $3.51 a month ago–but $3.55 a year ago. In the last week, the average for premium broke $4 for the first time since the unhappy summer (in gas-price terms) of 2008. (Asked on Thursday whether the administration planned to release oil from the U.S. strategic reserve, the White House said no. Still, rumors of it persist.)
Unemployment claims drop, stocks rise
The U.S. Department of Labor reported on Thursday that for the week ending March 10, initial unemployment claims were 351,000, a drop of 14,000 from the previous week’s revised figure of 365,000. The four-week moving average, which doesn’t jump around as much as the weekly figure, in fact didn’t move at all last week. It was 355,750, unchanged from the previous week’s revised 355,750.
Wall Street was peppy on Thursday, with the Dow Jones Industrial Average gaining 58.66 points, or 0.44 percent, and the S&P 500 and the Nasdaq up 0.6 percent and 0.51 percent, respectively. It was the first time the S&P 500 ended a trading day above 1400 since before the Panic of 2008.