Economy Watch: Residential Price Increases Continue Deceleration
An indication that home-price increases are slowing down (or, to look at it positively, there’s no new housing bubble): CoreLogic reported that home prices nationwide, including distressed sales, increased 10.5 percent in April compared to the same month in 2013.
By Dees Stribling, Contributing Editor
An indication that home-price increases are slowing down (or, to look at it positively, there’s no new housing bubble): CoreLogic reported on Tuesday that home prices nationwide, including distressed sales, increased 10.5 percent in April compared to the same month in 2013. That’s the smallest that metric has been in over a year.
The news came on the heels of the latest Case-Shiller numbers, which pointed to the same conclusion, but whose data was for March. Excluding distressed sales, CoreLogic said that home prices nationally increased 8.3 percent in April 2014 compared last year, also a relatively small amount. In CoreLogic’s reckoning, distressed sales include both short sales and REO transactions.
“The weakness in home sales that began a few months ago is clearly signaling a slowdown in price appreciation,” Sam Khater, deputy chief economist for CoreLogic, notes. “The 10.5 percent increase in April, compared to a year earlier, was the slowest rate of appreciation in 14 months.”
Auto sales strong in May
U.S. consumers might not be buying as many houses as they used to, but they certainly are buying new cars at a robust pace. According to the research firm Autodata on Tuesday, sales came in at an annualized 16.77 million vehicles (cars and light trucks) in May. That was stronger than expected, and in fact the strongest pace since February 2007, before the recession.
The aggregate sales figure for the month—about 1.6 million vehicles—was up about 11.3 percent compared with the previous month, and probably expressed continuing pent-up demand after a hard winter, since March and April were strong sales months, too. The top seven automakers selling in the U.S. (GM, Chrysler, Ford, Toyota, Nissan, Honda and Hyundai) all enjoyed sales increases for the month.
Vehicles sales were above an annualized 16 million units during November 2013, dropped for a few months, and then climbed back. Annual sales between 16 million and 17 million units were the norm during the early 2000s. At the worst of the recession, the annual total dropped just below 10 million vehicles.
Wall Street, which is in record territory these days, nevertheless had a mild down day on Tuesday, with the Dow Jones Industrial Average losing 21.29 points, or 0.13 percent. The S&P 500 was down a scant 0.04 percent and the Nasdaq declined 0.07 percent.