New Home Sales Edge Up; Mortgage Delinquencies Drop; Wall Street Hit by Bogus Tweet
- Apr 24, 2013
New home sales advanced in March to an annualized rate of 417,000 units, up 1.5 percent above the revised February rate of 411,000 and 18.5 percent higher than during March 2012, according to the Census Bureau on Tuesday. The gain came from sales in the Northeast and the South, which each saw roughly 20 percent gains, while sales were down in the West by roughly the same percentage, mainly because of low supply.
For the first quarter of 2013, new home sales were at an annualized rate of 424,000 units. That’s the strongest quarter since the third quarter of 2008, according to the bureau, back when the bottom was about to fall out of the market. Still, both the monthly and quarterly rates are historically low: 600,000 units a year is considered a minimum for a healthy market.
The bureau also reported that the supply of new homes for sale is 153,000 units, which represents 4.4 months at the current sales rate. A “normal” supply is less than six months’ worth of inventory, and the current supply compares favorably to 12-plus months back in the pit of the recession (January 2009). The bureau’s definition of for sale includes permits issued or units started, for which no contract has been signed nor deposit accepted.
Mortgage Delinquencies Still Dropping
In its First Look report for March, Lender Processing Services said on Tuesday that U.S. mortgage delinquency rate—by which it means loans 30 or more days past due, but not yet in the foreclosure process—decreased to 6.59 percent from 6.8 percent in February. The percentage of loans actually in foreclosure dropped slightly, from 3.38 percent in February to 3.37 percent in March.
Compared with last year, the number of delinquent mortgages is also down from 6.8 percent to 6.59 percent. The number of mortgages in foreclosure is down since this time last year, but by a much more significant amount: from 4.19 percent to 3.38 percent, which is more than a quarter drop over the year.
Though the number of properties delinquent and in foreclosure is still high by historic standards, the combined total did reach a kind of milestone in March. At 4.997 million, that’s the first time since the Panic of 2008 that that number has been lower than 5 million. In March 2012, some 5.589 million mortgages were either delinquent or in foreclosure.
Wall Street Hit by Bogus Tweet
Wall Street was up again on Tuesday, and by a considerable margin, but that wasn’t the interesting event for the day. Early in the afternoon, the stock market fell suddenly on a report that an explosion at the White House had injured President Obama. The Dow Jones Industrial Average lost about 100 points in two minutes, and the other major indices were down in lockstep.
The report, which appeared to traders as an AP tweet, was completely false. Soon the news organization announced that its Twitter account had been hacked, resulting in a bogus tweet for reasons that are still unclear. Soon the markets were back up again, and in fact the Dow ended up 152.29 points, or 1.05 percent, while the S&P 500 gained 1.04 percent and the Nasdaq advanced 1.11 percent.