Economy Watch: Home Prices Down, Indicators Up
- Apr 22, 2011
April 22, 2011
By Dees Stribling, Contributing Editor
The Federal Housing Finance Agency said that its House Price Index dropped 1.6 percent from January to February, a sharper than expected contraction. Compared with February 2010, prices for homes financed with mortgages backed by Fannie Mae or Freddie Mac, which is what the FHFA tracks, were down 5.7 percent.
In other words, the housing market has taken a journey into the past, with every gain since 2004 now just a memory. The worst year-over-year decline was in the Federal Reserve District (which is how the FHFA divides the nation) that includes Colorado and Nevada, which was down 12 percent. The district including California and Oregon lost 8.7 percent of its value year-over-year.
Distressed properties are still dragging the indexes down. The National Association of Realtors reported earlier this weekend that as of March foreclosures and short sales represented 40 percent of all residential transactions, up a tick of 1 percentage point since February.
Conference Board Leading Indicators Edge Upward
The Conference Board reported that its various economic indicators–leading (LEI), coincident and lagging–were all up in March, pointing to better U.S. business conditions, at least in the near term. Maybe troubles around the world aren’t quite as frightening now to American businesspeople as they were a year ago, when something as firecracker-like as the prospect of Greek default set the economy on edge.
“The U.S. LEI continues to point to sustained economic growth through year end,” Ken Goldstein, economist at the Conference Board, noted in a statement. “Global disruptions, including unrest in the Middle East, rising oil prices and the Japan earthquake, may have some repercussions. However, it remains to be seen what the impact of these shocks will be on the United States and the broader global economy.”
The Leading Index for the U.S. increased 0.4 percent in March to 114.1 (2004 = 100), following a 1 percent increase in February and a 0.2 percent increase in January. The coincidence index increased 0.2 percent in March to 102.9, following a 0.1 percent increase in February, and the lagging index increased 0.4 percent in March to 108.3, following a 0.3 percent increase in February.
Administration Targets “Oil Speculators”
The Obama administration unveiled plans for a task force under the direction of Attorney General Eric Holder to investigate “fraud and manipulation” in oil markets. “We are going to make sure that no one is taking advantage of the American people for their own short-term gain,” President Obama said at a town hall meeting in Reno, Nev., casting a few aspersions on oil “traders and speculators,” though in truth taking advantage for short-term gains describes some parts of the economy quite well.
The move is clearly in response to the political pressure created by rising gas prices, whose average is now $3.84 a gallon nationwide, up 30 cents only since last month, and up about a dollar from this time last year. Probably traders and speculators are indeed driving the price of that commodity up, in that they’re eager to buy oil and are bringing big bucks to the table, but it’s a lot less clear that a government task force will be able to do anything other than chase those greased pigs around for a while, to little effect.
Wall Street seemed giddy again on Thursday in the wake of some positive earnings reports, with the Dow Jones Industrial Average up 52.45 points, or 0.42 percent. The S&P 500 gained 0.53 percent and the Nasdaq advanced 0.63 percent.