Economic Roundup: May 31, 2010



In the News

Existing home sales were once again on the rise in April, with completed sales transactions of single-family homes, townhomes, condominiums and co-ops increasing 7.6 percent, the National Association of REALTORS® (NAR) reported last week.
The increase put April's sales pace at a seasonally adjusted annual rate of 5.77 million units, compared to March's 5.36 million units. While the increase was encouraging news, the jump was also expected.
"The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market," said NAR's chief economist Lawrence Yun. "For people who were on the sidelines, there's been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low."
In terms of pricing, the national median existing-home price for all housing types in April was $173,100. Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March.
Meanwhile, sales of new single-family homes in April were at a seasonally adjusted annual rate of 504,000, according to estimates released jointly last week by the Census Bureau and the Department of Housing and Urban Development. April's performance was 14.8 percent above March's revised rate of 439,000.
The median sales price of new houses sold in April was $198,400. The seasonally adjusted estimate of new houses for sale at the end of April was 211,000, which represents a supply of five months at the current sales rate.
Like the upswing in real estate performance, the Conference Board reported that its Consumer Confidence Index for May saw a third consecutive monthly gain. The Index now stands at 63.3, up from 57.7 in April.
"Consumers' apprehension about current business conditions and the job market continues to slowly dissipate," said Lynn Franco, director of the Conference Board's Consumer Research Center. "Consumers' expectations, on the other hand, have increased sharply over the past three months … The improvement has been fueled primarily by growing optimism about business and labor market conditions."
This week, keep an eye on the headlines for news updates on construction spending (June 1) and factory orders (June 3) from the Census Bureau; auto and truck sales (June 2) from the auto manufacturers; and productivity (June 3) payrolls, earnings and average workweek (June 4) from the Bureau of Labor Statistics.

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