Economy Watch: Existing Home Sales, Initial Claims Up; Delinquency, Foreclosure Rates, Wall Street Down; CPI Flat

Existing U.S. home sales increased 0.4 percent in January. The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 7.09 percent. And initial unemployment claims are up, while Wall Street is down, and the Consumer Price Index is unchanged.

By Dees Stribling, Contributing Editor

The National Association of Realtors reported on Thursday that total existing U.S. home sales increased 0.4 percent to an annualized rate of 4.92 million in January from a downwardly revised 4.9 million in December. The pace of sales this January is up 9.1 percent compared with January 2012

Not only are total sales up year over year, but the ratio of distressed-to-conventional sales is changing for the better. That is, there was a smaller percentage of distressed home sales in January 2013 than a year ago: foreclosures or short sales accounted for 23 percent for sales this January, compared with 35 percent a year earlier.

Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace, the NAR said. That’s down from 4.5 months in December, and is the lowest housing supply since April 2005, when it was also 4.2 months.

Delinquency, Foreclosure Rates Drop

The Mortgage Bankers Association said on Thursday that the delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 7.09 percent of all outstanding loans (seasonally adjusted) at the end of the fourth quarter of 2012, the lowest level since 2008. The current rate represents a decrease of 31 basis points from the previous quarter, and 49 basis points from the fourth quarter of 2011.

The trend is even more promising because of the timing of the drop. While delinquency rates typically increase between the third and fourth quarters of the year, even the non-seasonally adjusted delinquency rate dropped 13 basis points to 7.51 percent this quarter from 7.64 percent last quarter. By MBA’s reckoning, the delinquency rate includes loans at least one payment past due, but not actually in foreclosure.

Also hopeful: the percentage of loans on which foreclosure actions were started during the fourth quarter was 0.7 percent, the lowest level since the second quarter of 2007, down 20 basis points from the third quarter of 2012 and down 29 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the fourth quarter was 3.74 percent, the lowest level since the fourth quarter of 2008.

Initial Claims Up, CPI Flat, Wall Street Down

The U.S. Department of Labor reported on Thursday that for the week ending Feb. 16, initial unemployment claims were 362,000, an increase of 20,000 from the previous week. The less jumpy four-week moving average jumped a bit to 360,750, an increase of 8,000 from the previous week.

Separately on Thursday, the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged between December and January. Compared to a year earlier, however, prices were up 1.6 percent. The startling upward increase in gas prices was only barely under way by the end of January, and wasn’t reflected much in the CPI (but it will be next month). Take energy and food out of the equation, and the CPI was up 0.3 percent in January alone, and 1.9 percent compared to a year earlier.

Wall Street had a listless day on Thursday, with the Dow Jones Industrial Average off 46.92 points, or 0.34 percent. The S&P 500 lost 0.63 percent and the Nasdaq was down 1.04 percent.

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