Statistics from the National Association of Realtors

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Posted on 1st September 2010 by Anthony in Industry News

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The NAR Research staff now gives you a weekly analysis of the economic data released during the past week, and how current economic conditions are affecting the real estate market. For daily economic forecasts, visit NAR Research’s Facebook page.

August 23, 2010:

  • The National Activity Index an indicator of economic activity from the Federal Reserve Bank of Chicago, the moved up to zero in July, from ‐0.70 in June. An index value of zero points to national economic growth along historical trend rates; a negative value indicates growth rates that are below‐average, while a positive value denotes above‐average growth.
  • The 10-year Treasury rate declined in August and continues to be at historic lows. As of August 20, the rate was 2.62 percent. In July of this year the rate was 3.50 percent, while a year ago the rate was 3.62.
  • The low rate bodes well for the cost of borrowing in other financial markets, and points to continued low mortgage rates.

August 24, 2010

August 25, 2010:

  • Mortgage purchase applications were up 0.6 percent for the week ending August 20, continuing the weakness in the home buying market seen post-tax credit. The level of mortgage activity remains near 13-year lows. However, purchase applications do not take into consideration all-cash purchases which according to the June REALTORS® Confidence Index made up roughly one-fourth of transactions.
  • Year-over-year purchase applications were down 39.2 percent. The weak job market continues to weigh heavily on the housing market.
  • Refinances made up 82.4 percent of mortgage activity increasing 5.7 percent as mortgage rates fell to the lowest level in 20 years of the survey’s data. The average rate for a 30-year fixed mortgage was 4.55 percent
  • New Home Sales were down to a historic low of 276,000 in July (the Census Bureau’s numbers for new homes go back to 1963). This is a 12.4 percent decrease from June’s 315,000 home sales.
  • The median price for a single-family home fell to $204,000 the lowest since 2003.
  • Durable goods orders increased 0.3 percent in July, however this was below expectations.
  • Motor vehicles continued to be one of the few bright spots in the report.

August 26, 2010:

  • Seasonally adjusted initial jobless claims declined by 31,000, or 6.2 percent, to 473,000 for the week ending August 21, 2010. This stops a streak of three consecutive weekly increases in initial claims.
  • Continuous claims also declined by 62,000, or 1.3 percent, to 4.46 million claims for the week ending August 14, 2010. However, this most likely reflects the expiration of benefits for some claimants rather than actual employment gains.
  • According to the Mortgage Banker’s Association, the seasonally adjusted percentage of loans that began the foreclosure process in the second quarter 2010, nationally, remained unchanged from the previous quarter at 1.17 percent. However, the second quarter rate is 30 bps below the 2009 rate of 1.47 percent.
  • The west exhibited the biggest year-over-year decrease in foreclosure starts. In the second quarter 2009, 1.78 percent of all loans began the foreclosure process. In the second quarter 2010, 1.27 percent of all loans began the foreclosure process. This represents a 51 bps decline.
  • Overall, there are two countervailing forces at work. Unemployment levels, although lower than the previous week’s level, still remain higher than they were in June. The lack of more robust job creation has hindered consumer confidence and housing demand. In contrast, foreclosure rates have declined from their peak levels in 2009, thereby decreasing the amount of housing inventory put back on the market.

August 27, 2010:

  • The Commerce Department revised the second quarter growth down. Gross domestic product, the value of all goods and services produced from April to June, rose 1.6 percent annualized, which is down from the initial 2.4 percent estimate.
  • The downward revision was mostly due to much higher imports and a smaller
    gain in business inventories. On the other hand, there was some improvement in residential fixed investment, an increase in nonresidential fixed investment, an improvement in state and local government spending, and an increase in federal government spending. In terms of inflation, the GDP price index was pushed up to 1.9 percent from the initial 1.8.
  • On a positive note, personal consumption was strong and increased 2.0 percent in the second quarter, compared with an increase of 1.9 percent in the first. However, according to the University of Michigan’s consumer sentiment index, also released today, confidence among consumers increased only slightly in August to 68.9 from 67.8 in July which was the lowest index since November. The weak consumer confidence may raise a risk of decline in consumer spending which accounts for about 70 percent of the GDP.