Economy Watch: Home Prices Up in Most MSAs; Yellen Details Reasons for Slow Job Growth

Existing single-family home prices rose in 133 out of 152 U.S. metropolitan statistical areas. And Federal Reserve Vice Chair Janet Yellen gives reasons for slow job growth at a conference.

By Dees Stribling, Contributing Editor

The National Association of Realtors reported on Monday that existing single-family home prices rose in 133 out of 152 U.S. metropolitan statistical areas, based on closings in the fourth quarter compared with same quarter in 2011, while 19 areas had price declines. In the third quarter, 120 areas showed increases from a year earlier, while during the fourth quarter of 2011 only 29 metros were up year-over-year.

The national median existing single-family home price was $178,900 in the fourth quarter, up 10 percent from $162,600 in fourth quarter of 2011, the NAR added. That’s the strongest year-over-year price increase since the fourth quarter of 2005, when the median price jumped 13.6 percent (the market was still bubbly in those days; no one is claiming that now). In the third quarter of 2012, the price rose 8.8 percent from a year earlier.

The Realtors noted two other important housing numbers: Total existing-home sales, including single-family and condo, rose 5 percent to an annualized rate of 4.9 million in the fourth quarter from 4.7 million in the third quarter, and were 12.1 percent above annualized pace during the fourth quarter of 2011. Also, at the end of fourth quarter of 2012, there were 1.8 million existing homes available for sale, which is 21.6 percent below the fourth quarter of 2011. Unsold inventory is at the lowest level since January 2001.

Yellen Details Reasons For Slow Job Growth

Federal Reserve Vice Chair Janet Yellen, speaking at “A Trans-Atlantic Agenda for Shared Prosperity” conference sponsored by the AFL-CIO, Friedrich Ebert Stiftung, and the IMK Macroeconomic Policy Institute on Monday in Washington D.C., took up the question: “Why has the recovery been so lousy for U.S. workers?” (To paraphrase it a bit.) Yellen cited a number of factors weighing on workers, starting with uninspiring fiscal policy.

“Discretionary fiscal policy hasn’t been much of a tailwind during this recovery… State and local governments were cutting spending and, in some cases, raising taxes for much of this period (since 2009) to deal with revenue shortfalls,” central banker Yellen said. “At the federal level, policymakers have reduced purchases of goods and services, allowed stimulus-related spending to decline, and have put in place further policy actions to reduce deficits.”

Housing has contributed very little to growth since the recession ended. “The reasons are easy to understand, given the central role that housing played in the Great Recession,” she added. Also, the recovery has also encountered some “unusual headwinds. The fiscal and financial crisis in Europe has resulted in a euro-area recession and contributed to slower global growth. Europe’s difficulties have blunted what had been strong growth in U.S. exports earlier in the recovery by sapping demand worldwide.”

Wall Street had a mildly down day on Monday, with the Dow Jones Industrial Average down 21.73 points, or 0.16 percent. The S&P 500 flirted with a five-year high, but ended down 0.06 percent, and the Nasdaq also lost 0.06 percent.

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