Economy Watch: Home Prices Up Annually, Barely Move Monthly; Oil Production to Rise, Gas Prices to Fall
- Jan 08, 2014
CoreLogic reported on Tuesday that home prices nationwide, including distressed sales, increased 11.8 percent in November 2013 compared to the same month a year earlier (the recent Case-Shiller indices reported similarly sized increases, but for the three months ending in October). The change represents the 21st consecutive monthly year-over-year increase in home prices nationally, according to the company. Excluding distressed sales, home prices increased by 10.4 percent year over year in November 2013.
On a month-over-month basis, however, the pace home price increases seems to indicate that the upsurge is slowing down. Including distressed sales, prices were up by only 0.1 percent in November compared to October, notes CoreLogic. Excluding distressed sales, home prices were up 0.3 percent month-over-month in November.
Not only that, the CoreLogic Pending Home Price Index indicates that December 2013 home prices, including distressed sales, are expected to drop 0.1 percent from November to December. Compared with the previous year, the increase in December 2013 will be 11.5 percent.
Oil Production to Rise, Gas Prices to Fall
In the most recent Short-Term Energy Outlook by the Energy Information Administration, which is the first of its monthly reports to include predictions for 2015, the agency said that next year domestic crude oil will reach the highest level in more than four decades. The EIA estimates U.S. total crude oil production averaged 7.5 million barrels a day (bbl/d) in 2013, an increase of 1 million bbl/d from the previous year, and further predicts that production will increase to 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015, a level not seen since 1972.
Increasing oil production (foreign as well as domestic) is also expected to help drive the price of gas down in the United States, according to the EIA. After falling to the lowest monthly average of 2013 in November, U.S. regular gasoline retail prices increased slightly to reach an average of $3.28 per gallon during December. The average gas price, which was $3.51 a gallon in 2013, is expected to fall to $3.46 a gallon in 2014 and $3.39 a gallon in 2015.
The rise in domestic production will also affect the trade deficit. The U.S. Department of Commerce reported on Tuesday that goods and services deficit in November was $34.3 billion, down from $39.3 billion in October, and part of the drop was a reduction in the value of petroleum imports. The trade deficit in petroleum has been as much as $30 billion a month in recent years, but has been dropping lately to around $15 billion a month.
Wall Street enjoyed its first up day of the new year on Tuesday, with the Dow Jones Industrial Average gaining 105.84 points, or 0.64 percent. The S&P 500 was up 0.61 percent and the Nasdaq advanced 0.96 percent.