Friday Economic Snapshot: The happy housing market
Up is down and black is white this August as temperatures are unseasonably pleasant throughout most of the country, and it’s downright fall-like up here in Minneapolis at Boating Industry HQ.
Now the official theme of 2013, the lackluster weather could certainly be better for the marine market, but the economy is still cooking and this week’s platter of economic indicators should leave us all feeling fat and sassy for one more week.
The Dow Jones Industrial Average is poised to end the week down at least 100 points without a Friday rally, yet consumer comfort is at a five-year high, home prices keep climbing, mortgage delinquencies are down and, thankfully, gas prices haven’t shot up to kill the summer fun. More neutral, job openings still haven’t changed.
Like any week, we’ve got a mixed bag, but this one’s mostly filled with the good stuff — so let’s get to it.
From the Mortgage Bankers Association comes news that delinquency rates on typical, one- to four-unit residences “decreased to a seasonally adjusted rate of 6.96 percent of all loans outstanding at the end of the second quarter of 2013.”
If you’re not keeping score from week to week, this is the lowest level since the middle of 2008 and an excellent sign that American homeowners are in houses they can afford and, by at least one measure, living within their means. Healthy consumers should create healthy consumer spending and continued health within the all-important housing market.
Another interesting tidbit in the report, the number of loans in foreclosure was 3.33 percent, 22 basis points lower than Q1 and 94 basis points lower than a year ago. States with lingering foreclosure problems include New Jersey, California, Arizona, Nevada and Connecticut.
Going back two months with its latest data, the CoreLogic House Price Index is a three-month average that showed June home prices rose by 11.9 percent compared with a year ago. This is the 16th consecutive monthly increase in home prices across the United States.
After dropping like a rock through late 2007 and all of 2008, the House Price Index stayed in the gutter until the beginning of 2012 when it has generally increased. The recent gains seen in 2013 mark the first time that the index has begun to claw its way into positive territory, though there’s still a distance to go before we get back to where we were in early ’07.
Excluding the housing bubble that started in 2001, we’re approaching a point where the historical trend line would be without that pesky bubble/recession. We can still climb further without overwhelming talk of another bubble, but it might be time to at least brace yourself for “the talk.”
If you’re following the Friday Economic Snapshot, you know our economic indicators have been largely positive lately with one major caveat: job growth.
Job openings have risen slightly to 3.936 million, yet the number of layoffs/discharges has almost exactly mirrored this number for the last several months, clearly showing that we’re only adding a miniscule number of jobs every month. This is not nearly enough to keep up with population growth, let alone dig our labor market out of its hole.
It’s strange. Corporate profits are sky high, job openings have jumped consistently — especially since the beginning of 2012 — and layoffs/quits have been consistent, yet new hires can’t seem to get any traction. What’s going to eventually move the needle? Something?
I hate to leave you on a cliffhanger, as we keep coming back to stagnant employee hiring data, but that’s how it goes this week.
Things are looking stable, external shocks have been largely nonexistent and the political calendar has yet to heat up and make every night’s news report a list of didn’t do’s and won’t do’s, so the economy is currently looking good.
If you’re at a barbecue with somebody that’s got any influence over the weather, politely ask him or her to turn it up a few degrees.