Economy Watch: Housing Inventory, Median Prices Up

By Dees Stribling, Contributing Editor

Realtor.com, which is part of the National Association of Realtors, reported on Thursday that the U.S. housing inventory recovery is broad and growing. Not only that, the net number of listings is still increasing, despite the fact that the summer season—when listings are at their highest—is nearly over. Month-over-month in August, the nationwide total was up 0.93 percent (though down 2.5 percent since last August).

While the national median list price didn’t change in August compared to July, price increases are becoming more widespread, according to NAR. More than 80 percent of the markets covered registered a year-over-year increase in median list price.

California markets continue to dominate the list of areas experiencing the largest year-over-year median list price increases, despite the surge in new property listings that has occurred in most of these markets. Also, Detroit, Phoenix, Reno and Las Vegas are still among the strongest markets in terms of rising prices since last year. By contrast, a number of smaller industrialized markets in the Midwest and the Northeast aren’t doing as well, and several major Florida markets are showing signs of re-emerging weakness.

Federal budget deficit drops

The U.S. budget deficit continued to contract in August, according to the U.S. Department of the Treasury on Thursday. Government revenue is up because of the recovering economy, and spending is down because of the sequester, with outlays exceeding receipts by $147.9 billion in August, compared with a gap of $190.5 billion the same month in 2012.

For the 11 months through Sept. 30, the deficit was $755.3 billion, the lowest it has been in five years for a similar period. When the final numbers for the full fiscal year are crunched, according to the Congressional Budget Office, the deficit will be even lower than that, because September will probably be a surplus month.

So far Congress is still being its dysfunctional self, and there’s no agreement yet about funding of the government past Sept. 30, though another three-month resolution to fund federal spending is before that body. The government is also almost near its statutory limit for borrowing—the $16.7 “debt ceiling,”—which will come in mid-October, and Congress hasn’t done anything about that, either.

Initial claims drop

For the week ending Sept. 7, initial unemployment claims were 292,000, according to the U.S. Department of Labor on Thursday, down 31,000 from the previous month, and an unusually low figure. Reportedly, two states made changes to their computer systems that delayed reporting of their claims, thus bumping the total figure downward more than usual.

Wall Street was down a little on Thursday, with the Dow Jones Industrial Average down 25.96 points, or 0.17 percent. The S&P 500 lost 0.34 percent and the Nasdaq was off 0.24 percent.