Economy Watch: Existing Home Sales Decline
- Oct 21, 2011
Existing homes sales saw a 3 percent slide in September to an annualized rate of 4.91 million units, according to the National Association of Realtors on Thursday. The August annualized total, which includes the completed sales of single-family, townhomes, condominiums and co-op residences, was revised upward to 5.06 million units. Compared with September 2010, when the industry was going cold turkey from the homebuyer tax credit, September 2011 sales were 11.3 percent higher.
NAR also reported that the national median existing-home price was $165,400 in September, down 3.5 percent from the same month in 2010. Distressed homes–foreclosures and short sales–accounted for 30 percent of sales in September (18 percent foreclosures and 12 percent short sales), down slightly from 31 percent in August and more significantly from 35 percent in September 2010.
First-time buyers accounted for 32 percent of transactions in September, unchanged from August; they were also 32 percent in September 2010. By contrast, the number of investors buying residential properties dropped somewhat month-over-month, perhaps as a spate of bad news gave would-be investors cold feet. In any case, investors accounted for 19 percent of U.S. home sales in September, down from 22 percent in August.
Leading indicators still up, but not much
The Conference Board said on Thursday that its Leading Economic Index (LEI) for the U.S. increased 0.2 percent in September to 116.4 following a 0.3 percent increase in August and a 0.6 percent increase in July. The components on the LEI include the likes of average weekly hours in manufacturing; average weekly initial claims for unemployment insurance; manufacturers’ new orders; building permits for housing; stock prices and money supply.
The organization’s Coincident Economic Index increased 0.1 percent in September to 103.3, and the Lagging Economic Index increased 0.2 percent in September to 110.4. The year 2004, just ahead the worst of the bubble and a little hard to remember now, counts as 100 on all of the indexes.
All in all, the Conference Board indexes point to soft economic conditions through the end of 2011, according to the organization. The weaknesses among the leading indicator components have become slightly more widespread in September, said Ataman Ozyildirim, an economist at the Conference Board, in a statement. “The slow pace in the LEI suggests a growing chance that this sluggish economy is going to be here for a while,” he posited.
Jobless claims inch downward
Initial jobless claims for the week ending Oct. 15 were 403,000, a decrease of 6,000 from the previous week’s revised figure of 409,000, according to the Bureau of Labor Statistics on Thursday. The four-week moving average, which is less volatile than the weekly one, came in at 403,000, a decrease of 6,250 from the previous week. Better but not enough to get the economy out of its ditch.
Wall Street had a mixed day on Thursday, with the Dow Jones Industrial Average gaining 37.16 points, or 0.32 percent and the S&P 500 up 0.46 percent. The Nasdaq, however, lost 0.21 percent.