Monday, 23 July 2012 15:21
QUOTE OF THE WEEK... "Never, never, never give up." --Winston Churchill
INFO THAT HITS US WHERE WE LIVE... The famed British statesman's advice certainly applies to the housing market. Indeed, those who haven't given up are starting to see positive signs. Wednesday, June Housing Starts were UP 6.9% for the month, UP 23.4% compared to a year ago and at their highest annual rate since October 2008.The total number of homes under construction (started but not finished) gained for the tenth month in a row, the first time that's happened since 2003-2004. No wonder Home Builder Confidence had its biggest monthly jump in almost 10 years.
Thursday, Existing Home Sales were off 5.4% for June, but they're still UP 4.5% compared to a year ago. The median price of an existing home, at $189,400, is UP 7.9% over a year ago, the largest annual gain since 2006. Average existing home prices are UP 6.9% versus last year, inventory is down 24.4% from a year ago and the supply of existing homes for sale is at 6.6 months. Some economists are even predicting that housing will add to GDP this year for the first time since 2007.
BUSINESS TIP OF THE WEEK... Instead of spending hours on all your marketing efforts, work in 15-minute bursts on one thing at a time -- for example, newsletter content, then tweets, then a Facebook survey.
ANXIOUSLY UP... Stocks fell Friday thanks to new anxieties over European sovereign debt (Spain again) and the Dow and the Nasdaq gave up all their July gains, although the three market indexes ended higher for the week. Fed Chairman Ben Bernanke didn't do much to relieve the anxiety, sharing his weaker economic outlook with Congress in his semi-annual testimony. Corporate earnings season began with a number of disappointing reports and even some of the positive ones were well-received only because of lowered expectations.
The week got off to a horrible start with June Retail Sales down 0.5%, dropping for the third month in a row. This clearly shows the economy slowing in Q2, although retail sales excluding autos are still up 3% in the last 12 months. Manufacturing data was mixed, with growth in New York, contraction in the Philadelphia region and Industrial Production up 0.4% overall. New weekly unemployment claims shot up by 24,000, heading back toward the 400,000 level. But the Fed's Beige Book hinted that reports on residential housing were "largely positive."
For the week, the Dow ended up 0.4%, at 12823; the S&P 500 was also up 0.4%, to 1363; and the Nasdaq climbed 0.6%, to 2925.
Even though stocks held their own midweek, the hammering they took on Friday over Eurozone worries sent investors scurrying to bonds. Prices went northward, with the FNMA 3.5% bond we watch ending the week UP .83, at $106.05. Average U.S. mortgage rates were mostly lower with some types of mortgages reaching all-time lows in Freddie Mac's weekly survey. Their Chief Economist said, "With little signs of inflation and...U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market."
DID YOU KNOW?... The net worth of an individual is the amount by which all their assets, including cash, exceed their liabilities.
NEW HOME SALES, PENDING HOME SALES, Q2 GDP... Housing and economic growth are the big topics this week. June New Home Sales are expected to show slow but steady upward movement. June Pending Home Sales, tracking contract signings on existing homes, should be up, but not by as much as the month before. This is an indicator for existing home sales a couple of months out.
All eyes will be on Friday's Q2 GDP read. Unfortunately, many economists are predicting slower growth from the original estimate, which was already down from the Q1 number.