Economy Watch: Pending Home Sales Edge Down
The National Association of Realtors reported on Monday that its Pending Home Sales Index, a forward-looking indicator based on contracts inked but not closed, declined 1.1 percent to 102.7 in June from 103.8 in May, and is 7.3 percent below June 2013 (when it was 110.8).
By Dees Stribling, Contributing Editor
The National Association of Realtors reported on Monday that its Pending Home Sales Index, a forward-looking indicator based on contracts inked but not closed, declined 1.1 percent to 102.7 in June from 103.8 in May, and is 7.3 percent below June 2013 (when it was 110.8). Despite June’s decrease, the index is still above 100—an average level of contract activity, according to the Realtors—for the second consecutive month after failing to reach the mark since last November.
NAR chief economist Lawrence Yun says that activity is notably higher than earlier this year as prices have moderated and inventory levels improved. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from taking advantage of lower interest rates,” he notes.
Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million units, compared to 5.1 million existing home sales in 2013. The national median existing-home price is projected to grow between 5 percent and 6 percent this year and in 2015, he added.
Social Security, Medicare solvent until ’30s
The trustees of Social Security and Medicare said on Monday that if Congress makes no change in existing law—seldom a safe bet—Medicare’s hospital insurance trust fund will be exhausted by 2030, four years later than projected last year. The Social Security trust fund, they also reported, will be depleted by 2033, the same as predicted last year. Together the programs account for about 40 percent of federal spending.
Medicare’s financial health has benefited from a slowdown in national health spending, according to the trustees, which they attributed in part to the impact of the Affordable Care Act. The trustees also cited slow growth of wages and prices in the wake of the Great Recession as a factor slowing down the growth of Medicare.
As for Social Security, the trustees’ report noted that the program’s trust fund ran a surplus of $32 billion last year and is on track to run another one this year, increasing its total reserves to nearly $2.8 trillion by the end of 2014. The trust fund’s assets will start declining rapidly about a decade from now, however. The annual reports issued the trustees—four federal officials and two public representatives—are prepared by career civil servants for the most part.
Wall Street ended the day mixed on Monday, but in fact barely moved, with the Dow Jones Industrial Average up 22.02 points, or 0.13 percent and the S&P 500 eking out a 0.03 percent gain. The Nasdaq lost 0.1 percent.