There has been a barrage of data released over the past two days and all seem to point in the same direction…down. However, its seems like a see-saw rather than a cohesive trend. Granted, the real estate related economic news is definitely not positive, but there is an awful lot of creedence placed on national statistics that is applied local markets as gospel. For example, if you own a stock, and the Dow Jones Industrial Average goes down that day, you may feel down even though the behavior of the DJIA may have no correlation to your own stock. National statistics are released monthly for the most part and it takes 3-5 months of consistent patterns before a trend becomes recognized by the masses. There’s enough of a dataset for monthly stats, but does a month to month change tell us much?
Here’s my issue with this barrage of information:
- national housing statistics do not necessarily apply to a local market. - no methodologies disclosed for seasonal adjustments. - refinance data included in the OFHEO sales stats. - housing sales data converted to rental data in inflation calcs. - most indicators are adjusted 1-2 times after the initial release.
Here’s the barrage of monthly economic data from the past few days (it occurs about this time every month):
New-Home Sales Falter [TheStreet.com] Sales of new single-family homes in the U.S. fell 5% in January, and the amount of unsold inventory rose to the highest level in nearly 10 years, the Commerce Department said Monday.
Number of Unsold Homes Hits Record High [Washington Post] _The backlog of unsold new homes reached a record level last month, as sales slipped despite the warmest January in more than 100 years.
Existing-Home Sales Fall Again; Consumer Confidence Wanes [WSJ] …a closely watched gauge of consumer confidence declined last month, driven lower by a drop in expectations for the economy over the next six months.
Like a Lion [WSJ] The Commerce Department will likely report today that in January, for the fourth month in a row, Americans increased spending at a faster pace than their incomes rose.
Sales of Existing Homes Near 2-Year Low; Consumer Confidence Ebbs [NYT] Sales of existing homes dropped to their lowest level in nearly two years in January, and the number of unsold homes on the market rose, a trade group reported yesterday. Also yesterday, a survey showed a surprising dip in consumer expectations, and the Commerce Department revised upward measures of economic growth and inflation in the fourth quarter. Taken together, the figures suggested that the economy, while strong today, may be poised for a slowdown in the second half of the year, especially if the Federal Reserve continues increasing short-term interest rates to keep inflation in check, analysts said.
Inflation eats up most income gains [MW] Real disposable incomes — after inflation and after taxes — increased 0.1% in January, the weakest gain since August. Real disposable incomes are up 2.2% in the past 12 months. Real consumer spending — adjusted for inflation — increased 0.4% in January, the weakest growth since October.
Home loan applications fall despite rate drop [USAToday] The Mortgage Bankers Association’s seasonally adjusted purchase mortgage index — considered a timely gauge on U.S. home sales — decreased 1.9% to 400.8 for the week ended Feb. 24 from the previous week’s 408.7.