Economy Watch: Existing Home Sales Spike
- Dec 21, 2012
The National Association of Realtors said on Thursday that total existing-home sales nationwide—including completed transactions for single-family houses, townhomes, condos and co-ops—rose 5.9 percent to an annualized rate of 5.04 million units in November, compared with 4.76 million in October. Moreover, the total is 14.5 percent higher than the 4.4 million-unit pace in November 2011, putting sales are at the highest level since November 2009, when the annual pace spiked to 5.44 million because of the aftereffects of the homebuyer tax credit.
Not only that, total U.S. housing inventory at the end of November fell 3.8 percent to 2.03 million existing units available for sale, which represents a 4.8-month supply at the current sales pace. That compares with 5.3 months in October, and is the lowest housing supply since September 2005, when it was 4.6 months.
At last, it seems, the ever-optimistic chief economist at NAR, Lawrence Yun, has good reason to be optimistic, since rising sales and especially falling inventory bode well for the health of the market in 2013. “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation,” Yun said in a press statement. “With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes.”
Leading economic indications decline slightly
The Conference Board reported on Thursday that its Leading Economic Index for the U.S. declined 0.2 percent in November to 95.8 (2004 = 100), following a 0.3 percent increase in October and a 0.4 percent increase in September. Over the last six months, however, the index has grown exactly zero.
According to Conference Board economist Ataman Ozyildirim, the recent movements of the index point to increasing risks of slowing economic activity in the near term, even though the organization’s coincident economic index, which measures current conditions, continued to increase in November. “Gains in the residential construction and financial components of the [Leading Economic Index] have been roughly balanced with weak consumer expectations, manufacturing new orders and labor market indicators over the last six months,” he noted in a press statement.
Separately, the U.S. Department of Labor reported on Thursday that for the week ending Dec. 15, initial unemployment claims were 361,000, an increase of 17,000 from the previous week’s revised figure of 344,000. The four-week moving average was 367,750, a decrease of 13,750 from the previous week’s unrevised average of 381,500, which means that the four-week average is finally seeing the last of the temporary impact that Sandy had on employment.
No progress on budget deal
Plan B or not Plan B? That was the question on Thursday evening as the negotiations on the fiscal cliff seemed to drag to a pre-holiday close without a conclusion. Plan B, the odd nickname for the House Republican idea of allowing taxes to rise only on the $1 million-a-year-in-income crowd, was reportedly going up for a vote; and then it wasn’t.
All the same, Wall Street was a bit optimistic on Thursday. The Dow Jones Industrial Average gained 59.75 points, or 0.45 percent, while the S&P 500 rose 0.55 percent and the Nasdaq was up 0.2 percent.