This Economic Update is courtesy of Mr. Drew Remson, of America’s Mortgage Resource, in Metairie.
Sales of newly built, single-family homes in May held virtually even with the previous month, declining less than one percentage point to a seasonally adjusted annual rate of 342,000 units, according to data released by the U.S. Commerce Department today. (Sales in greater New Orleans did not decline)
“In the midst of the prime home buying season, builders report that a number of factors are limiting new-home sales. These include consumer concerns about job security, potential buyers’ inability to sell their existing homes, and problems with appraisals coming in too low,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Oklahoma. “The latter issue is directly related to the use of distressed properties (foreclosures and short sales) as comps, which disproportionately impacts assessed values of nearby homes.”
Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.
The U.S. Commerce Department reported new orders for durable goods for the month of May up +1.8%, tied with April. Durable goods include any item expected to last at least three years. While two months are clearly not a trend, back-to-back monthly gains are clearly a positive signal.
So, what’s next? There is still uncertainty in the markets. The stock market is showing pressure to sell off after several weeks gains. This could be a plus for the bond market if this happens. Economists are saying the recession has slowed it’s free fall with some expectations of a turn around in the third to fourth quarter.
Annunciation Green Project #4
This weeks interview with the Project Manager, and Building Manager of Southern Homes, the company that is building our Annunciation Street project, focuses on the design process that eliminates waste, thus reducing the impact on forests. Check out the video!
