Economy Watch: Home Prices Still Climbing
- May 22, 2013
American home values continued to climb in April, according to the latest Zillow Real Estate Market Report that was released on Tuesday. The increase was 0.5 percent compared with March, coming in at an average price of $158,300. Moreover, the company noted, home values were up 5.2 percent year-over-year, marking the sixth month in a row of annual home value appreciation at or above 5 percent. The last time national home values increased this fast was in June 2004.
A majority (55 percent) of the 365 metros covered saw home values climb for the month. Of the 30 largest metro areas covered, Sacramento experienced the largest monthly increase, with home values rising 3.4 percent. Other large metro areas with notable monthly increases include Las Vegas (3 percent) and San Francisco (2.8 percent).
In the short term, these kinds of increases are welcome news for homeowners, Zillow chief economist Stan Humphries noted in a press statement. “But in the long term, this cannot be sustained, and consumers entering the market today should not expect this kind of appreciation to last. Overall, we expect home value appreciation to moderate as more supply comes on line over the next year, but in some areas, runaway home value appreciation… runs a real risk of pricing out many potential buyers.”
Truck tonnage drops slightly in April
The American Trucking Associations’ For-Hire Truck Tonnage Index fell 0.2 percent in April after rising 0.9 percent in March, the organization reported on Tuesday. According to the ATA, trucking serves as a barometer of the U.S. economy, since trucking represents 67 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.
In April, the index equaled 123.2 (2000 = 100) versus 123.5 in March. Year-to-date compared with the same period in 2012, the tonnage index is up 4 percent. Compared with April 2012, the SA index was up 4.3 percent, which is the largest year-over-year gain since January.
“The slight drop in tonnage during April fits with trends from other industries that drive a significant amount of truck freight, such as manufacturing and housing,” ATA chief economist Bob Costello explained in a press statement, noting that in April, compared with the previous month, factory output slipped 0.4 percent while housing starts plunged 16.5 percent. “After rising significantly late last year and in January of this year, truck tonnage has been bouncing around a narrow but elevated band over the last three months.”
Philly coincident indexes up
The Federal Reserve Bank of Philadelphia said on Tuesday that coincident indexes increased in 45 states, decreased in four states, and remained stable in one (Minnesota). Over the past three months, the indexes increased in 47 states, decreased in two (Wisconsin and Wyoming), and remained stable in one (Alaska).
On the whole, in other words, most state economies are going in the right direction. The Philly Fed calculates coincident indexes by combining four state-level indicators to summarize current economic conditions in a single statistic. The four state-level components are payroll employment, average manufacturing hours worked, the unemployment rate and wage and salary disbursements deflated by the CPI.
Wall Street bounced up on Tuesday, with the Dow Jones Industrial Average gaining 52.3 points, or 0.34 percent. The S&P 500 and the Nasdaq inched up less, rising 0.17 percent and 0.16 percent, respectively.