Economic Update – September 5, 2011

Pending home sales, a forward-looking indicator based on signed contracts, fell 1.3% in July after a 2.4% increase in June. On a year-over-year basis, pending sales are up 14.4%.

The Standard & Poor’s/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 1.1% in June after a 1% increase in May. On a year-over-year basis, prices fell 4.5% compared with June 2010.

The consumer confidence index fell to 44.5 in August from 59.5 in July. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 26 fell 9.6%. Refinancing applications decreased 12.2%. Purchase volume rose 0.9%.

Factory orders rose 2.4% in July to a seasonally adjusted $453.2 billion, following a revised 0.4% decrease in June. Excluding the volatile transportation sector, orders rose 0.9% in July.

The Institute for Supply Management reported that the monthly composite index of manufacturing activity fell to 50.6 in August after a reading of 50.9 in July. A reading above 50 signals expansion. It was the 25th straight month of expansion.

Total construction spending fell 1.3% to $789.5 billion in July, following an upwardly revised 1.6% gain in June. Economists had anticipated an increase of 0.1% in July.

Initial claims for unemployment benefits fell by 12,000 to 409,000 for the week ending August 27. Continuing claims for the week ending August 20 fell by 18,000 to 3.7 million. The monthly unemployment rate remained unchanged at 9.1% in August.

Economic Update – May 9, 2011

The Institute for Supply Management reported that the monthly composite index of manufacturing activity fell to 60.4 in April after reaching 61.2 in March. A reading above 50 signals expansion. It was the 21st straight month of expansion.

Total construction spending rose 1.4% to $768.9 billion in March, following a 1.4% decrease in February. Economists had anticipated an increase of 0.5% in March.

Retail sales fell 0.8% for the week ending April 30, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.8%.

Factory orders rose 3% in March to a seasonally adjusted $462.9 billion, following an upwardly revised 0.7% increase in February. Excluding the volatile transportation sector, orders rose 2.6%.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending April 29 rose 4%. Refinancing applications increased 6%. Purchase volume rose 0.3%.

The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity fell to 52.8 in April from 57.3 in March. A reading above 50 signals expansion. It was the 16th straight month of expansion in the services sector.

The Labor Department reported that in the first quarter productivity rose at an annual rate of 1.6% and labor costs increased at an annual rate of 1%.

Initial claims for unemployment benefits rose by 43,000 to 474,000 for the week ending April 30. Continuing claims for the week ending April 23 rose by 74,000 to 3.73 million. The monthly unemployment rate rose to 9% in April from 8.8% in March.


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Economic Update – March 21, 2011

Last Week in the News


Retail sales rose 0.1% for the week ending March 12, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 3.1%.

The National Association of Home Builders/Wells Fargo housing market index rose one point in March to 17. An index reading below 50 indicates negative sentiment about the housing market.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending March 11 fell 0.7%. Refinancing applications increased 0.9%. Purchase volume fell 4%.

The combined construction of new single-family homes and apartments in February fell 22.5% to a seasonally adjusted annual rate of 479,000 units. Single-family starts decreased 11.8%. Multifamily starts dropped 46.1%. Applications for new building permits, seen as an indicator of future activity, fell 8.2% to an annual rate of 517,000 units.

The producer price index, which tracks wholesale price inflation, rose 1.6% in February after a revised 0.7% increase in January. Core prices — excluding food and fuel — rose 0.2% in February.

Consumer prices rose a seasonally adjusted 0.5% in February, following a 0.4% increase in January. For the year, seasonally adjusted consumer prices are up 2.2%.

Industrial production at the nation’s factories, mines and utilities fell 0.1% in February, following a revised 0.3% increase in January. Compared to a year ago, industrial production is up 5.6%. Capacity utilization was 76.3% in February.

Initial claims for unemployment benefits fell by 16,000 to 385,000 for the week ending March 12. Continuing claims for the week ending March 5 fell by 80,000 to 3.7 million.

California pending home sales rise in January

LOS ANGELES (Feb. 23) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) debuted its Pending Home Sales Index and released key distressed property data.

Pending home sales index:

Pending home sales in California increased in January, according to C.A.R.’s Pending Home Sales Index (PHSI)*.  The index was 93.6 in January, rising 13.6 percent from December’s index of 82.4, based on contracts signed in January.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

“Pending sales typically rise in January from a seasonally slow November and December,” said C.A.R. President Beth L. Peerce.  “January’s pending sales should be reflected in higher existing sales activity in February and March and serve as a precursor to the spring home buying season.”

Distressed housing market data:

  • The total share of all distressed property types sold statewide in January was 54 percent, up from 50 percent in December, but down from 56 percent in January 2010.
  • Conventional sales made up the remaining share at 46 percent in January, down from 50 percent in December, but up from 44 percent in January 2010.
  • Of the distressed properties sold statewide, the total share of REO (real estate-owned) sales was 32 percent in January, up from 30 percent in December, but was down from 37 percent in January 2010.
  • The statewide share of short sales increased to 22 percent in January, up from 20 percent in December and up from 19 percent in January 2010.
  • The median price of homes sold in the state differed dramatically depending on the property type, with non-distressed properties selling for much higher prices than short sales and foreclosures.
  • The statewide median price of conventional properties sold in January was $367,150, 38 percent higher than the short sale median price of $265,500 recorded in January, and 85 percent higher than the January REO median price of $198,000.

Multimedia:

Share of Distressed Sales to Total Sales

Type of Sale

Jan-10

Dec-10

Jan-11

REOs (real estate-owned) 37% 30% 32%
Short Sales 19% 20% 22%
Total Distressed Sales 56% 50% 54%

Distressed Sales by Select Counties (Percent of total sales)

County/Region
Jan-10
Dec-10
Jan-11
CA 56 50 54
San Diego 34 28 33
Marin 37 34 43
Orange 41 38 43
San Luis Obispo 49 46 47
Los Angeles 54 50 54
Mendocino 49 57 55
Napa 68 54 59
Sonoma 54 55 61
Kern 69 71 70
Sacramento 68 66 73
Riverside 78 67 73
San Bernardino 76 72 74
Solano 76 74 81

*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property.  The majority of pending home sales usually becomes closed sales transactions one to two months later.  The year 2008 was used as the benchmark for the pending homes sales index. An index of 100 is equal to the average level of contract activity during 2008.