Economy Watch: Home Prices Inch Up, Says CoreLogic
CoreLogic reported that U.S. home prices, including those generated by distressed sales, increased by 2 percent in May 2012 compared with the same month a year ago.
Take short sales and REOs out of the equation, and nationally home prices were up in May 2.7 percent year-over-year, and 2.3 percent month-over-month. CoreLogic predicts that prices will continue to rise, perhaps as much as 1.4 percent in June counting distressed properties, and 2 percent without them.
“The recent upward trend in U.S. home prices is an encouraging signal that we may be seeing a bottoming of the housing down cycle,” Anand Nallathambi, president and CEO of CoreLogic, noted in a press statement. “Tighter inventory is contributing to broad, but modest, price gains nationwide and more significant gains in the harder-hit markets, like Phoenix.”
Construction spending inches up, too
U.S. construction spending was up 0.9 percent in May compared with April, according to the Census Bureau on Monday. Compared with May 2011, spending is up 7 percent, with May 2012 seeing a total of $830 billion spent on construction projects. Private multifamily construction spending in particular ballooned by 50.3 percent in May compared with the same month in 2011.
Private construction projects accounted for the entire increase, experiencing a 1.6 percent month-over-month uptick. Government construction spending in May, by contrast, dropped 0.4 percent compared with April, dragging down the total. Compared with last year, private spending is up 13.1 percent, while public spending is down 3.9 percent.
Separately, the Institute for Supply Management reported that its Purchasing Managers Index for U.S. manufacturing dropped to 49.7 percent in June, down from 53.5 percent in May. Below 50 means a manufacturing contraction, and this is the first month since 2009 the index has hit a level below 50.
California tightens foreclosure law
On Monday, the California legislature approved a pair of bills designed to put tighter controls on residential foreclosures within the state. The bills, which passed the state Assemby 53-25 and the California Senate 25-13, will (among other things) make “dual tracking” by lenders unlawful. That is, the much noted and widely derided practice of lenders foreclosing on a borrower despite the fact that the borrower is still in negotiations with the lender to change the terms of the loan.
Robo-signing is also officially forbidden—that is, the use of false signatures on foreclosure documents. The law allows the state and citizens to sue lenders in cases of robo-signing, though the cap on damages is $50,000. The measure now goes to Gov. Brown, who is expected to sign it.
Wall Street couldn’t decide which way to go on Monday, with the Dow Jones finally ending down 8.7 points, or a minuscule 0.07 percent. The S&P 500 was up 0.25 percent and the Nasdaq gained 0.55 percent.
