Economy Watch: Pending Home Sales See Downtick; Recovery Still Distant for Many; Lew Says No to Debt Ceiling Deal, Detroit Bailout
- Jul 30, 2013
The National Association of Realtors reported on Monday that its Pending Home Sales Index dropped a notch in June to 110.9 from May’s reading of 111.3. The May reading was the index’s highest level since before the housing bubble burst; back in December 2006, the index maxed out at 112.8.
In June 2012, the index was exactly at 100, so the most recent level still illustrates a relatively healthy pace of pending home sales. Pending sales have been higher than year-ago levels for the past 26 months, according to the NAR, despite experiencing periodic month-over-month downticks.
NAR chief economist Lawrence Yun noted in a statement that higher home prices and interest rates are beginning to impact affordability, notably in high-cost regions.
“Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June,” he said. “The persistent lack of inventory also is contributing to lower contract signings.”
Recovery Still a Distant Dream for Many
A recent survey by the Pew Research Center finds that a large number of respondents – 44 percent, to be exact – believe that it will be “a long time” before the U.S. economy recovers. Smaller percentages say that a recovery will be “soon” (26 percent) and that the economy is already in recovery (28 percent). The findings were based on a survey of 1,480 American adults conducted July 17-21.
The respondents’ feelings about current economic conditions, which had improved a little in June, dropped again for the July survey. According to 17 percent of the respondents, economic conditions are “excellent” or “good,” while 82 percent rated conditions as only “fair” or “poor.” All together, 37 percent of the respondents though the economy was “poor.”
Even so, these perceptions represent a significant improvement compared with the pit of the recession. In February 2009, a whopping 71 percent of respondents rated economic conditions as “poor,” the highest percentage ever recorded by a Pew survey on the subject. In the summer of 2011, 56 percent said the economy was “poor.”
Lew Says No to Debt Ceiling Deal, Detroit Bailout
U.S. Secretary of the Treasury Jack Lew appeared on a number of news programs on Sunday morning — Meet the Press, Fox News Sunday, This Week and State of the Union – and, among other things, asserted that the Obama administration won’t negotiate with Congress about raising the debt ceiling. The federal government will reach the limits of its statutory authority for borrowing in the fall, and (a few) in Congress are making noises about attaching conditions to raising the ceiling. Secretary Lew also said that the federal government isn’t going to bail out Detroit.
Wall Street had a down day on Monday, with the Dow Jones Industrial average dropping 36.86 points, or 0.24 percent. The S&P 500 declined 0.37 percent and the Nasdaq lost 0.39 percent.