Economy Watch: New Home Sales, Mortgage Delinquencies, Gas Prices
- Oct 27, 2014
The Census Bureau reported on Friday that the sale of new single-family houses nationwide came in at an annualized rate of 467,000 units in September, up 0.2 percent from August. The year-over-year increase is healthier, however, up 17 percent since September 2013.
Even so, new home sales haven’t really recovered from the recession – at least, not in the way sales used to recover from recessions. Except for the recessionary periods after World War II, home sales were historically between 600,000 and 800,000 units (roughly) until the bubble of the 2000s drove sales way up, exceeding 1.2 million for a few short years just before the crash.
The bureau’s estimate for the inventory of houses for sale in September is 207,000 units. That represents a supply of 5.3 months at the current sales rate, and is within the “normal” range of less than six months. During the worst of the recession, inventories were greater than 12 months.
Mortgage Delinquencies Still Slipping
In its First Look report for September, Black Knight listed the percentage of delinquent U.S. residential mortgages at 5.67 percent, compared with 5.9 percent in August. In September 2013, the delinquency rate was 6.46 percent. By delinquent, the company means more than 30 days late in payment but not actually in foreclosure.
The percent of loans in the foreclosure process declined to 1.76 percent in September from 1.8 percent in August. A year ago, 2.63 percent of residential mortgages were in the foreclosure process, according to the report
In terms of total properties, about 1.76 million units were delinquent in September, down from 1.852 million in August, and 1.935 million a year earlier. The number of properties in foreclosure in September totaled 893,000 units, down month-over-month from 913,000 and year-over-year from 1.331 million.
Gas Prices Lowest in Four Years
As October draws to a close, gas prices keep falling nationwide, a trend that has the potential to free consumer resources to be spent on other things as the holiday season approaches. AAA reported that as of Sunday, the national average for a gallon of regular was $3.05, down from $3.344 a month ago and $3.302 a year ago. In fact, an international glut in oil has driven domestic gas prices down to their lowest level in about four years.
Wall Street had another strong up day on Friday, with the Dow Jones Industrial Average bouncing up by 127.51 points, or 0.76 percent. The S&P 500 gained 0.71 percent and the Nasdaq advanced 0.69 percent.