Economy
New Home Sales Rebound From September Low
Written by Sandy Williams
December 5, 2013
New residential sales in October soared 25.4 percent above the revised September rate of 354,000 to a seasonally adjusted annual rate of 444,000. In comparison, the October 2012 annual estimate was 365,000, a 21.6 percent increase year-over-year. The surge beat economist expectations ranging from 425,000 to 429,000 sales for the period.
The median sales price for new homes in October was $245,800 and the average sale price was $321,700. It was the fourth month in a row that the median price fell and a possible indication that builders are dropping prices. On a seasonally adjusted basis it is estimated that 183,000 new homes were for sale at the end of October—a 4.9 month supply at the current sales rate.
Sales were up in all four regions of the US, with the Midwest leading with a rebound of 34 percent.
September and October data were delayed due to the government shutdown and released together on Dec. 4. Sales in July through September dropped below a seasonally adjusted rate of 400,000 leading some economists to suggest increasing mortgage rates affected the market more than previously estimated.
The strong gain in the stock market has been offered as a reason for the rebound in home purchases as buyers become more confident of economic recovery. Low inventory of existing homes and easier financing by builders to encourage buyers are also key reasons said Keith Gumbinger, VP of mortgage information at HSH Associates in an article by CNN Money.
Housing recovery depends on wage growth, household formation and inventory says T. Rowe Price Associates chief economist Alan Levenson. The number of households generally grows by 1.5 percent per year as young people graduate from college or move out of their parent’s homes. The rate dropped by 2/3 during the recession said Levenson. Wages have been slow to grow this year but low inventory and improved demand should stimulate new construction.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Metalformers expect steady conditions in coming months
Metalformers expect economic activity to stabilize over the next three months, according to the recently released July Business Conditions Report from the Precision Metalforming Association (PMA).
Architecture Billings Index rises from 4-year low in June
The Architecture Billings Index (ABI) ticked up in June following May’s four-year low, according to the American Institute of Architects (AIA) and Deltek. While the index improved this month, it continues to indicate weak business conditions among architecture firms.
Beige Book: Uncertainty to continue fueling slower economic growth
Growth in the US economy continues to be constrained. The Federal Reserve’s Beige Book report for July shows more areas reporting flat or declining economic activity than in its previous report at the end of May.
AISI, AISC, University of Massachusetts get ~$6.4M EPA grant
The American Iron and Steel Institute (AISI), American Institute of Steel Construction (AISC), and the University of Massachusetts at Amherst have received a grant to enhance emissions reporting for steel construction projects.
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in July, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.