Economy Watch: Seniors Housing Builders More Optimistic
The state of the housing market’s been getting some worried attention lately but the National Association of Home Builders offered a small but hopeful note.
By Dees Stribling, Contributing Editor
The state of the housing market’s been getting some worried attention lately—Fed Chair Janet Yellen voiced concerns this week before Congress, for instance—but on Thursday the National Association of Home Builders offered a small but hopeful note. Namely that builder confidence in the single-family 55+ housing market for the first quarter of 2014 is up year-over-year, according to the organization.
Compared to the first quarter of 2013, the single-family index increased four points to 50, which is the highest first-quarter reading since the inception of the index in 2008 and the 10th consecutive quarter of annual improvements. Two of the components of the 55+ single-family index posted increases from a year ago: present sales rose six points to 52 and expected sales for the next six months climbed nine points to 62. At the same time, traffic of prospective buyers held steady at a lowish reading of 41.
“The 55+ segment of the housing market is stronger now than it was a year ago,” NAHB chief economist David Crowe notes. “[It’s] helped by factors like rising house prices, which have increased owners’ equity and allowed them to buy in a 55+ community. But there are still some headwinds hampering a stronger recovery, as builders in many markets are facing tight credit conditions and a lack of lots and labor.”
Home price increases slowing down
Another housing metric released on Thursday found that overall housing prices are continuing to rise, though not as fast as in the last two years or so. Nationally, asking prices rose 0.8 percent month-over-month and 2.8 percent quarter-over-quarter in April, according to Trulia. Those gains are in line with March increases and show that home prices continue to climb.
On the other hand, asking prices rose 9 percent year-over-year, which is the smallest annual increase in 11 months. One reason annual price increases are slipping despite monthly and quarterly increases holding steady is that so far the biggest price spike during the housing recovery happened between February and April 2013, and the year-over-year change in April 2014 no longer includes those months.
Trulia also reported data on apartment rents on Thursday. Nationally, rents have increased 4.5 percent since this time last year. Some places are seeing even larger spikes in rental rates: San Francisco, Oakland and Denver are all up more than 10 percent compared with April 2013.
Initial unemployment claims drop
The U.S. Department of Labor reported on Thursday that for the week ending May 3, initial unemployment claims were at an annualized rate of 319,000, a decrease of 26,000 from the previous week. The four-week moving average was 324,750, an increase of 4,500 from the previous week.
Wall Street bounced around on Thursday and ended the day mixed. The Dow Jones Industrial Average was up 32.43 points, or 0.2 percent. The S&P 500 lost 0.14 percent and the Nasdaq was down 0.4 percent.