Economic Roundup: June 28, 2010

In the News

Still buoyed by the federal tax credit, sales of existing homes in May continued to perform at a healthy pace, but were slightly down from April, the National Association of REALTORS® reported last week. Performance was a mixed bag, depending on region, with the West and South enjoying gains while the Northeast and Midwest showed steady performance.
Overall, sales of existing single-family homes, townhomes, condominiums and co-ops in May were at a seasonally adjusted annual rate of 5.66 million units, which was down 2.2 percent from April's upwardly revised surge of 5.79 million. In comparison to last year, May's closings were 19.2 percent higher than May 2009's sales of 4.75 million units.
NAR's statistics for June's existing home sales, once tallied, could continue to benefit from the lingering effects of the tax credit, according to Lawrence Yun, NAR's chief economist.
"We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings," Yun said last week. "However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales."
On the opposite side of the spectrum, sales of new single-family homes for May plunged by a precipitous 32.7 percent, ringing in 300,000 units, compared to April's revised rate of 446,000 units, according to data released last week by the Census Bureau. May's sales were even 18.3 percent below May 2009's sales of 367,000.
All in all, May was the slowest month for new home sales in 47 years. The news completely flummoxed real estate analysts, who were expecting to see a drop for May due to the end of the new home buyer tax credit, but nowhere near a third.
The drop in sales volume for May was accompanied by an improvement in price performance. For existing home sales, the national median price was $179,600, slightly up from April's median of $173,100. Similarly, the median sales price for new houses sold in May was $200,900, compared to April's median of $198,400.
This week's financial news will include stories on personal income and spending (June 28) from the Bureau of Economic Analysis; consumer confidence (July 1) from the Conference Board; car and truck sales (July1) from the auto manufacturers; payrolls and the average workweek (July 2) from the Bureau of Labor Statistics; and construction spending (July 1) and factory orders (July 2) from the Census Bureau.


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