From the AP Associated Press via MSNBC on July 31, 2009
GDP dips at better-than-expected 1 percent pace, but revisions are deep
WASHINGTON - The U.S. economy sank at a pace of just 1 percent in the second quarter of the year, a new government report shows. It was a better-than-expected showing that provided the strongest signal yet that the longest recession since World War II is finally winding down.
The dip in gross domestic product for the April-to-June period, reported by the Commerce Department on Friday, comes after the economy was in a free fall, tumbling at an annual rate of 6.4 percent in the first three months of this year. That was the sharpest downhill slide in nearly three decades.
The economy has now contracted for a record four straight quarters for the first time on records dating to 1947. That underscores the grim toll of the recession on consumers and companies.
Many economists were predicting a slightly bigger 1.5 percent annualized contraction in second-quarter GDP. It's the total value of all goods and services — such as cars and clothes and makeup and machinery — produced within the United States and is the best barometer of the country's economic health.
"The recession looks to have largely bottomed in the spring," said Joel Naroff, president of Naroff Economic Advisors. "Businesses have made most of the adjustments they needed to make, and that will set up the economy to resume growing in the summer," he predicted.
Less drastic spending cuts by businesses, a resumption of spending by federal and local governments and an improved trade picture were key forces behind the better performance. Consumers, though, pulled back. Rising unemployment, shrunken nest eggs and lower home values have weighed down their spending.
A key area where businesses ended up cutting more deeply in the spring was inventories. They slashed spending at a record pace of $141.1 billion. There was a silver lining to that, though: With inventories at rock-bottom, businesses may need to ramp up production to satisfy customer demand. That would give a boost to the economy in the current quarter.
The Commerce Department also reported Friday that the recession inflicted even more damage on the economy last year than the government had previously thought. In revisions that date back to the Great Depression, it now estimates that the U.S. economy grew just 0.4 percent in 2008. That's much weaker than the 1.1 percent growth the government had earlier calculated.
Also Friday, the government reported that employment compensation for U.S. workers has grown over the past 12 months by the lowest amount on record, reflecting the severe recession that has gripped the country.
Federal Reserve Chairman Ben Bernanke has said he thinks the recession will end later this year. And many analysts think the economy will start to grow again — perhaps at around a 1.5 percent pace — in the July-to-September quarter. That would be anemic growth by historical measures, but it would signal that the downturn has ended.
Friday, July 31, 2009
Monday, July 27, 2009
New home sales soar 11 percent in June
New home sales soar 11 percent in June
From MSNBC
Largest monthly increase in more than eight years, Commerce Dept. says
The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.
It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.
The report is another encouraging sign that the beleaguered housing sector is finally coming back to life. Last Thursday, the National Association of Realtors reported that home resales posted a monthly increase of 3.6 percent in June.
There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007.
Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.
From MSNBC
Largest monthly increase in more than eight years, Commerce Dept. says
WASHINGTON - New U.S. home sales rose by the largest amount in more than eight years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.
The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.
It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.
The report is another encouraging sign that the beleaguered housing sector is finally coming back to life. Last Thursday, the National Association of Realtors reported that home resales posted a monthly increase of 3.6 percent in June.
There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007.
Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.
Thursday, July 23, 2009
Existing-home sales hit 8-month high
Posted by Elizabeth Strott on Thursday, July 23, 2009 10:33 AM on MSN Money
Inventories fall, adding hopes that the housing market is starting to recover.
Existing-home sales rose 3.6% in June to an annualized pace of 4.86 million, to the highest level since October, the National Association of Realtors reported this morning.
It was the third monthly increase in a row.
Economists had expected an annualized pace of 4.85 million last month. Sales are down 0.2% from June of 2008.
Inventories fell 0.7% to 3.82 million in June. At the current sales pace, it would take 9.4 months to sell homes on the market, an improvement from the 9.8 months in May.
A 7-month supply is typically consistent with stabilization in prices, NAR chief economist Lawrence Yun, said in a press conference. It may take until the end of this year or early 2010 before property values steady, Yun added.
So who's buying? Tax incentives are helping spark resale activity in lower-priced homes. The supply of homes under $250,000 is under a six-month supply, while the supply of homes over $1 million is over 20 months.
That excess supply is contributing to the slump in home prices. The median price of an existing home fell 15.4% to $181,800 from $215,000 in June 2008.
June is traditionally one of the best sales months of the year as families prepare to move before the start of the next school term, according to the NAR. The group adjusts the figures for these seasonal variations, however.
Home sales peaked in August 2005 at an annualized rate of more than 7.2 million. Sales have not topped the 5 million mark since last September.
Inventories fall, adding hopes that the housing market is starting to recover.
Existing-home sales rose 3.6% in June to an annualized pace of 4.86 million, to the highest level since October, the National Association of Realtors reported this morning.
It was the third monthly increase in a row.
Economists had expected an annualized pace of 4.85 million last month. Sales are down 0.2% from June of 2008.
Inventories fell 0.7% to 3.82 million in June. At the current sales pace, it would take 9.4 months to sell homes on the market, an improvement from the 9.8 months in May.
A 7-month supply is typically consistent with stabilization in prices, NAR chief economist Lawrence Yun, said in a press conference. It may take until the end of this year or early 2010 before property values steady, Yun added.
So who's buying? Tax incentives are helping spark resale activity in lower-priced homes. The supply of homes under $250,000 is under a six-month supply, while the supply of homes over $1 million is over 20 months.
That excess supply is contributing to the slump in home prices. The median price of an existing home fell 15.4% to $181,800 from $215,000 in June 2008.
June is traditionally one of the best sales months of the year as families prepare to move before the start of the next school term, according to the NAR. The group adjusts the figures for these seasonal variations, however.
Home sales peaked in August 2005 at an annualized rate of more than 7.2 million. Sales have not topped the 5 million mark since last September.
Thursday, June 25, 2009
Report: D.C.-area home prices up 3.4% in April
Washington Business Journal
by Tucker Echols, Staff Reporter
Thursday, June 25, 2009
Report: D.C.-area home prices up 3.4% in April
A new report indicates that Washington-area home prices rose in April — a sign the market may be establishing a bottom.
Home prices in the Washington area, as measured by research firm Radar Logic, were up 3.4 percent in April, compared to March. Nationally, the gain among 25 top metropolitan areas was 1.2 percent, the first increase since home prices peaked in June 2007.
D.C.-area prices, like those nationally, are still weaker than a year ago. April prices in the Washington area were 15.2 percent lower than April 2008, according to Radar Logic.
Nationwide prices remain 20 percent below year ago levels.
by Tucker Echols, Staff Reporter
Thursday, June 25, 2009
Report: D.C.-area home prices up 3.4% in April
A new report indicates that Washington-area home prices rose in April — a sign the market may be establishing a bottom.
Home prices in the Washington area, as measured by research firm Radar Logic, were up 3.4 percent in April, compared to March. Nationally, the gain among 25 top metropolitan areas was 1.2 percent, the first increase since home prices peaked in June 2007.
D.C.-area prices, like those nationally, are still weaker than a year ago. April prices in the Washington area were 15.2 percent lower than April 2008, according to Radar Logic.
Nationwide prices remain 20 percent below year ago levels.
Tuesday, June 16, 2009
Friday, May 15, 2009
HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments On FHA-Insured Loans
May 13, 2009 - HUD Secretary Shaun Donovan’s decision to allow consumers to use the $8,000 first-time home buyer tax credit to help cover their downpayment and closing costs on FHA-insured mortgages will be a big boost to the housing market, according to the National Association of Home Builders (NAHB).
“The biggest obstacle for first-time buyers is coming up with a downpayment,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track.”
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or “bridge loans” up to the amount of the $8,000 first-time home buyer tax credit.
Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buye r would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.
Robson and others NAHB leaders discussed this matter and other housing-related issues with Secretary Donovan last week.
“Secretary Donovan shares our view on the need for a housing and economic recovery,” said Robson. “We appreciate his leadership in moving swiftly to help first-time home buyers to access the tax credit up-front at the time of closing. The timing could not have been better as we are in the midst of the crucial spring home buying season.”
The next step is to see how FHA-approved lenders use HUD’s new guidelines to actually monetize the tax credit for first-time home buyers and structure the payback provisions o f the loans. NAHB encourages lenders to act promptly to put these provisions into place.
To qualify for the tax credit, first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Buyers can take the credit on their 2008 or 2009 income tax return.
For further information about the tax credit – including a detailed question and answer section and a number of home-buying resources for consumers – log on to NAHB’s consumer Web site at www.federalhousingtaxcredit.com. A Spanish version is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
“The biggest obstacle for first-time buyers is coming up with a downpayment,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track.”
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or “bridge loans” up to the amount of the $8,000 first-time home buyer tax credit.
Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buye r would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.
Robson and others NAHB leaders discussed this matter and other housing-related issues with Secretary Donovan last week.
“Secretary Donovan shares our view on the need for a housing and economic recovery,” said Robson. “We appreciate his leadership in moving swiftly to help first-time home buyers to access the tax credit up-front at the time of closing. The timing could not have been better as we are in the midst of the crucial spring home buying season.”
The next step is to see how FHA-approved lenders use HUD’s new guidelines to actually monetize the tax credit for first-time home buyers and structure the payback provisions o f the loans. NAHB encourages lenders to act promptly to put these provisions into place.
To qualify for the tax credit, first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Buyers can take the credit on their 2008 or 2009 income tax return.
For further information about the tax credit – including a detailed question and answer section and a number of home-buying resources for consumers – log on to NAHB’s consumer Web site at www.federalhousingtaxcredit.com. A Spanish version is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Sunday, March 1, 2009
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