Economy Watch: Existing Home Sales Drop
- Jul 20, 2012
Existing home sales, which have been on an upward trajectory most of this year, took a dip in June, according to the National Association of Realtors. The drop was 5.4 percent, to an annualized rate of 4.37 million, compared with 4.62 million in May. June 2012 was still higher than June 2011, however, by 4.5 percent.
Housing inventory—including the whole ball of wax: single-family, condos, co-ops and townhouses—fell 3.2 percent during June. The total number of existing homes for sale at the end of the month was 2.39 million units, representing a 6.6-month supply at current prices, NAR said. That’s up from 6.4 months in May, because prices have edged up a bit.
Distressed properties accounted for 25 percent of June sales, according to NAR (13 percent were foreclosures and 12 percent were short sales), unchanged from May but down from 30 percent in June 2011. Foreclosures sold for an average discount of 18 percent below market value in June, while short sales were discounted 15 percent.
Leading Economic Index declines
The Conference Board reported on Thursday that its Leading Economic Index for the U.S. declined 0.3 percent in June to 95.6 (the happy(ish) year 2004 = 100). The decline followed a 0.4 percent increase in May, and a 0.1 percent decline in April, the organization said.
“The strengths among the leading indicators have become less widespread as consumer expectations and manufacturing new orders offset gains in the financial, labor, and construction-related components,” noted Ataman Ozyildirim, an economist at the Conference Board, in a press statement. “Meanwhile, the coincident economic index, a measure of current economic conditions, has risen slowly but steadily in the last three months.”
Indeed, the organization also reported that its Coincident Economic Index for the U.S. increased 0.2 percent in June to 104.5 (2004 = 100). This came on the heels of two monthly increases: a 0.2 percent uptick in May, and a 0.4 percent rise in April.
Unemployment claims swing upward
The weekly rate of initial unemployment claims, which is known for its volatility, lived up to that reputation for the week ending July 14, spiking up to 386,000. The week before the rate had been 352,000. Because of the precipitous drop the week before, the four-week average went the opposite direction, declining 1,500 to 375,500.
Wall Street didn’t seem too upset by housing or employment numbers, and had another mildly up day on Thursday, perhaps dreaming of QE3. The Dow Jones Industrial Average gained 34.66 points, or 0.27 percent, while the S&P 500 was up 0.27 percent and the Nasdaq had a larger gain of 0.79 percent.