Economy Watch: New Home Sales Edge Up
- Aug 24, 2012
New home sales were up in July to an annualized rate of 372,000 units, compared with a revised June total of 359,000, according to the Census Bureau on Thursday. The July total represents a 3.6 percent increase from June and a 25.3 percent increase from July 2011, so it seems likely that new home sales will indeed have a better year this year than last.
The bureau also estimates that about 142,000 U.S. houses were for sale at the end of July. At the current sales rate, that’s a supply of 4.6 months, which is completely within the new normal range for housing inventory, which has been under six months for some time. The all-time high in new home inventory was January 2009—back then, practically no one was buying—when the total supply was more than 12 months.
The Census Bureau defines a house for sale as “when a permit to build has been issued in permit-issuing places or work has begun on the footings, or foundation in non-permit areas and a sales contract has not been signed nor a deposit accepted.”
FHFA reports higher home prices
The FHFA reported that U.S. house prices rose 1.8 percent from the first quarter to the second quarter of 2012, according to its purchase-only house price index. The index captures much, but not all of the activity in the nationwide market, since it’s calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Still, it points in the general direction of the market, and it’s the largest quarterly increase by percentage since 2005.
The agency’s expanded-data house price index, a metric introduced in August 2011 that adds transactional information from county recorder offices and the FHA to the index’s data sample rose 2 percent over the latest quarter. Over the latest four quarters—the only four quarters for this particular metric—the index is up 2.4 percent
Among the 25 most populated MSAs in the U.S., quarter-over-quarter price increases were greatest in the Miami-Miami Beach-Kendall, Fla., coming on the heels of a resurgent housing market in southern Florida, partly spurred by greater investment by Latin American and other overseas buyers. The area saw prices increase by 8.3 percent between the first and second quarters of this year. The FHFA says that prices were weakest in New York-White Plains-Wayne, NY-NJ region, where they fell 1.5 percent over the same period.
Jobless claims see uptick
For the week ending Aug. 18, initial unemployment claims edged up to 372,000, an increase of 4,000 from the previous week. The generally less volatile four-week moving average was also up to 368,000, an increase of 3,750 from the previous week.
Wall Street took a dive on Thursday on (possible) worries that the Fed would in fact abstain from QE3 come next month. The Dow Jones Industrial Average lost 115.3 points, or 0.86 percent, while the S&P 500 was down 0.81 percent and the Nasdaq declined by 0.66 percent.