Economy Watch: Another Positive Home Price Report
- Jun 05, 2013
According to CoreLogic, which released its house price index for April on Tuesday, U.S. home prices were up 12.1 percent this April compared with last April. That jump includes distressed sales, and represents the largest annual increase in the index since February 2006, during the bubble expansion. On a month-over-month basis, including distressed sales, home prices increased by 3.2 percent in April.
Excluding distressed sales, home prices increased on an annual basis by 11.9 percent in April, according to CoreLogic (which doesn’t adjust for seasonal variations). Month-over-month, excluding distressed sales, home prices increased 3 percent in April. In the company’s reckoning, distressed sales include both short sales and REO transactions.
“House price growth continues to surprise to the upside,” Mark Fleming, chief economist for CoreLogic, notes in a press statement. “Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains, most clearly seen in the Western states with year-over-year gains of 20 percent or more.”
Trade deficit widens in April
Americans bought more from overseas in April than they sold to other countries—as usual—but the size of the deficit was up, according to the Bureau of Economic Analysis on Tuesday. Total April exports of $187.4 billion and imports of $227.7 billion resulted in a goods-and-services deficit of $40.3 billion, up from $37.1 billion in March, the government found.
Most of the trade deficit is with China (also as usual), with that deficit remaining roughly the same since last year—down to $24.1 billion in April 2013, compared with $24.5 billion a year earlier. The U.S. deficit with the euro zone was $10 billion in April, up from $7.8 billion last year. That’s mainly because the ailing economies of the euro zone have cut back on everything, including imports from across the Atlantic.
The drop in the price of oil in recent months meant that the deficit wasn’t quite as wide as it could have been, however. Though the price of oil was up a bit month-over-month in April, it dropped from $109.69 a barrel in April 2012 to $97.82 a barrel in April 2013.
Americans still building big houses
On Tuesday, the Census Bureau released data about the stock of new housing completed nationwide during 2012, a total of 483,000 single-family homes. Of that total, 198,000 had four bedrooms or more, while only 63,000 had two or less. Bathrooms are even more popular; 145,000 homes had three or more, while only 34,000 had one and one-half or less.
Some 278,000 new homes had a warm-air furnace and 183,000 had a heat pump as the primary heating system; 285,000 heating systems were powered by gas and 189,000 were powered by electricity. The majority of new homes—266,000—rose two stories or more, and the average single-family house completed in 2012 measured 2,505 square feet.
Wall Street wobbled down on Tuesday after ending up on Monday, with the Dow Jones Industrial Average dropping 76.49 points, or 0.5 percent. The S&P 500 and the Nasdaq were off 0.55 percent and 0.58 percent, respectively.