Friday Economic Snapshot: Home prices creep up
As we head into the season of giving thanks, this week we can all be grateful that we’re not Obamacare point person Kathleen Sebelius or Toronto Mayor Rob Ford who have both had undeniably rough weeks.
Looking at the American economy is much less tumultuous and salacious — something we can all be grateful for. In this week’s biggest economic news, gas prices continue looking positive (Typhoon Haiyan’s impact remains to be seen), home prices are back on the rise, household debt is increasing ahead of the holiday season, weekly unemployment claims have taken yet another welcome dip and, you guessed it, the stock market has been on a tear shooting up more than 200 pounds during this second full week of November.
From FNC comes excellent news that home prices posted the fastest quarterly gain since the beginning of the economic recovery. Its index, which gauges the price movement among non-distressed home sales, increased 2.5 percent between the second and third quarters of 2013.
From the report: “Rising home sales and relatively low foreclosure sales are the key drivers of continued increases in home prices. As of September, foreclosure sales nationwide accounted for 13.4% of total home sales, up slightly from August’s 12.7% but down from 16.6% a year ago. Home prices are expected to grow at a more moderate pace in the coming months because housing demand tapers off in the winter.”
As long as we’re keeping an eye out for a bubble (anybody seen how many cranes are hovering over Miami?), rising home prices are good news for most every sector of the American economy.
Here’s a data point we haven’t shared in a while, the Household Debt and Credit Report from the New York Federal Reserve. According to its latest analysis, consumer debt increased in the third quarter by $127 billion, which is the largest increase seen since the first quarter of 2008.
Total consumer debt is up to a face melting $11.28 trillion, an increase of 1.1 percent from Q2. This is 11 percent below the national peak of $12.68 trillion in the third quarter of 2008.
It’s a fascinating report, and one that suggests consumers are through with years of deleveraging that, according to the report, “is a significant change.” It sure is…
Weekly unemployment claims have settled into a post-recessionary period mimicking levels consistently seen between 2004 and early 2008, and this week’s data shows seasonally adjusted initial claims at 339,000. This is a modest decrease of 2,000 from the previous week, and puts the four-week moving average at 344,000, a decrease of 5,750 from last week’s numbers that showed a surprising jump in claims.
All in all, economic fundamentals are looking good with the ever-present looming threat of government meddling after the first of the year. Until then, we’re looking at rising home prices, palatable gas prices and holiday spending that is looking to be lower than the previous year.
We’ll have to see how the markets and retailers swallow this pill should it prove to be accurate. On the plus side, we all should really work on those swelling debt levels, let alone gravy-fed waistlines.