Economy Watch: CoreLogic Says Home Prices Inching Up; Spain Loses Access to Capital Markets
- Jun 06, 2012
By Dees Stribling, Contributing Editor
CoreLogic reported on Tuesday that U.S. home prices — including distressed sales — increased by 1.1 percent on a year-over-year basis in April. That marks the second consecutive year-over-year increase this year in CoreLogic’s reckoning, and the first time two consecutive increases have occurred since June 2010. As for the month-over-month change in April, prices recorded a 2.2 percent increase.
Take out distressed sales (both short sales and REOs), and CoreLogic notes that home prices saw a 2.6 percent monthly gain in April, which is the third month-over-month increase in a row. Ex-distressed sales, prices rose by 1.9 percent in April 2012 compared with the same month in 2011.
“We see the consistent month-over-month increases … as one sign that the housing market is stabilizing, CoreLogic president and CEO Anand Nallathambi said in a statement. Home prices are responding to a restricted supply that will likely exist for some time to come — an optimistic sign for the future of our industry.
ISM Non-Manufacturing Index Up Slightly
According to the Institute for Supply Management on Tuesday, its Non-Manufacturing index was at 53.7 percent in May, up slightly from 53.5 percent in April. Since 50-plus means expansion, U.S. non-manufacturing industries experienced growth a little faster in May than in April, but not by much.
The organization’s employment index, however, took something of a hit. That index dropped from 54.2 percent in April to 50.8 percent in May, meaning that employment’s still expanding, but not by much. The prices index went into contraction territory, dropping from 3.8 percentage points to 49.8 percent, indicating lower month-over-month prices for the first time since July 2009.
Still, Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said in a statement that “the majority of the respondents’ comments are positive and optimistic about business conditions and the direction of the economy.” Fully 13 non-manufacturing industries reported growth in May, he added.
Spain Loses Access to Capital Markets
The Wall Street Journal reported on Tuesday that Spain’s Budget Minister Cristobal Montoro told other euro-zone finance ministers (and the rest of the world) that the Spanish government has, in effect, lost access to capital markets because the costs of borrowing are now too high. Spain has become a high-risk proposition in the eyes of lenders, and those lenders want to be compensated for walking the tightrope.
The minister’s admission was seen as both unsettling and as a clear play for assistance from euro-zone members who can afford it, and from various EU institutions, especially the ECB. Lately Spain has floated the idea of a direct euro-zone bailout of its sickly banking sector, but other zone members (that is, Germany) haven’t come around to the idea yet. But the heat is on.
Wall Street was up on Tuesday, with the Dow Jones Industrial Average gaining 26.49 points, or 0.22 percent. The S&P 500 was up 0.57 percent and the Nasdaq advanced 0.66 percent.