Economy Watch: NAHB Says Homebuilders Slightly Less Glum
- Oct 19, 2010
October 19, 2010
Dees Stribling, Contributing Editor
The National Association of Home Builders said on Monday that the NAHB/Wells Fargo Housing Market Index (HMI) for October rose from 13 to 16–dismal to fairly bad, in terms that the organization did not use. It was, however, the first improvement in the index in five months, returning to its June 2010 level.
All three of the HMI’s component indexes registered gains in October. The index gauging current sales conditions rose three points to 16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11. Anything under 50 means that more builders think that conditions are poor than disagree with that assessment. Low scores for the index have been the norm for a while now.
“The new homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer,” NAHB chief economist David Crowe said in a statement that’s as optimistic as possible, under the circumstances. “While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase.”
Bank of America to Resume Some Foreclosures
Bank of America has said that it will resume foreclosures as early as next week in some 102,000 cases in the 23 “judicial foreclosure” states. The bank had stopped all foreclosure activity on Oct. 8, pending an internal review of its practices.
“We anticipate that by Oct. 25, the first foreclosure affidavits will be resubmitted to the courts,” the bank said in a statement on Monday, presumably indicating that the bank believes that the affidavits weren’t robo-signed. “Upon judgment, foreclosure dates will be set and Bank of America will resume foreclosure sales in such proceedings in the 23 judicial states.”
In the “non-judicial foreclosure” states, the halt in foreclosures is being continued for the time being, according to the bank, but it adds than fewer than 30,000 such foreclosures are being delayed. “As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,” the bank asserts.
Luxury Goods Moving Again
According to the latest annual report by Bain & Co., which was paid for by Fondazione Altagamma, an association of high-end luxury goods makers in Italy, high-net-worth individuals are again shopping en masse for the likes of jewelry, watches, fine leather goods, designer clothes and other things that the rich buy to feel rich. The report estimates that spending on such items worldwide in 2010 will be $236.7 billion, a 10 percent increase from 2009, which saw an 8 percent drop compared with 2008.
Not all parts of the world are snapping up ultraluxury items as rapidly as others. Luxury spending growth in Asia will be 22 percent more this year than last, primarily fueled by nouveau riche Chinese who really, really want to feel rich. Ultraluxury sales in the U.S. will see 12 percent growth, while in Europe the increase will be 6 percent, according to the report.
Wall Street rebounded somewhat on Monday, with the Dow Jones Industrial Average up 80.91 points, or 0.73 percent. The S&P 500 gained 0.72 percent and the Nasdaq advanced 0.48 percent.