Economic Roundup: September 27, 2010

Mark Ott

Loan Officer

W.J. Bradley Mortgage Capital Corp.

Office: 928-775-9330

NMLS: 189552

License: BK-0903998

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Last week's housing news led with the Census Bureau's report that building permits for private housing in August were at a seasonally adjusted annual rate of 569,000, which was 8 percent above July's revised rate of 559,000. Permits for single-family homes in August were at a rate of 401,000, which was 1.2 percent below the revised July figure of 406,000. In terms of construction, starts on privately owned housing in August were at a seasonally adjusted annual rate of 598,000, which was 10.5 percent above the revised July estimate of 541,000. Starts on single-family homes in August were at a rate of 438,000, which was 4.3 percent above the revised July figure of 420,000.
Sales of new homes were flat for August, with sales of new single-family homes at a seasonally adjusted annual rate of 288,000, which was unchanged from the revised July rate of 288,000. The median sales price of new houses sold in August was $204,700 and the average sales price was $248,800.
While new home sales were flat for August, the National Association of REALTORS® reported last Friday that sales of existing homes increased 7.6 percent in August to a seasonally adjusted annual rate of 4.13 million from July's revised rate of 3.84 million. NAR's median price for existing homes for all housing types was $178,600 in August.
NAR chalked up the post-tax credit increase to a very slowly stabilizing housing market: "Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the home buyer tax credit stimulus," said Lawrence Yun, NAR chief economist, in a public statement. "Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own."
This week will have a fairly busy financial calendar with the Conference Board releasing its consumer confidence figures for last month on Tuesday. Only major shifts in consumer attitudes portend sudden shifts in consumption patterns, and not much change is expected with this report.
The Bureau of Economic Analysis will release its personal income and consumption data on Thursday, which is expected to show moderate increases at the most. Flat or near-flat performance in consumer income and spending will mean no risk of inflation, and thus stable interest rates.
On Friday, the Census Bureau will release its data on construction spending for August, and with July's data (announced this month) at a 10-year low, good news is not expected in that regard. This could be a long-term trend as some analysts do not expect new home construction to bounce back until 2012.
Also on Friday, the auto manufacturers will release their car and truck sales figures, which are a good indicator of consumer demand, given that they typically comprise 25 percent of total retail sales.


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