Thursday, October 20, 2016

First-Time Buyers Lifted Existing Home Sales in September

Existing home sales rose 3.2% to a seasonally adjusted annual rate of 5.47 million in September, according to the National Association of Realtors (NAR). Sales were spurred by a surge in first-time home buyers. Annual sales of homes increased across all regions, rising 5.7% in the Northeast, 3.9% in the Midwest, 0.9% in the South and 5.0% in the West.

“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” said NAR Chief Economist Lawrence Yun. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of the summer created more opportunities for aspiring first-time homeowners to buy last month.”

The total housing inventory rose 1.5% to 2.04 million homes available for sale, while the median existing home price moved up 5.6% over the year to $234,200.

Distressed sales fell to 4% of the total in September, the lowest share since NAR began tracking them in 2008. Three percent of sales were foreclosures and 1% were short sales. On average, foreclosures and short sales sold for discounts of 15% and 11%, respectively.

Read the NAR release.
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Wednesday, October 19, 2016

Housing Starts Fell Sharply in September

Housing starts fell to a seasonally adjusted annual rate of 1.047 million in September, 9.0% below the revised august estimate of 1.150 million and 11.9% below the September 2015 rate.

Housing activity fell in most regions, falling 36.0% in the Northeast, 14.1% in the Midwest and 5.3% in the South. Activity in the Midwest was virtually unchanged during the month.

In contrast, new building permits rose 6.3% to 1.152 million. Permits are now 8.5% above the September 2015 rate.

Housing completions were at a seasonally adjusted annual rate of 951,000, down 8.4% from the revised August estimate and 5.8% below the September 2015 rate.

Read the Census release.
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Beige Book: Economic Expansion Continues

Economic activity expanded across most of the twelve Federal Reserve Districts over the late August to early October period, according to the just-released Federal Reserve Beige Book. Most Federal Reserve Districts reported “modest” or “moderate” expansion; however, the New York District reported no change in activity.

Banking conditions remained favorable, despite seasonal softening in some lending categories. Competition and credit quality for borrowers remained strong across the Districts. Several Districts noted that delinquency rates remained low or declined since the last report.

Consumer spending was mixed this period. The near-term outlook in the Boston, Philadelphia, Richmond, Atlanta and St. Louis Districts was for modest growth, while the Cleveland and Kansas City Districts anticipated flat sales. Several Districts noted the effects of unseasonably warm weather on sales of cold-weather apparel and of the strong dollar on spending by international customers.

Agricultural conditions were once again mixed amid strong production and low prices. Contacts in the Kansas City District noted that weak farm income was affecting borrower liquidity, and farmers in the Dallas District expressed concerned about their ability to get financing for the next year.

Employment expanded at a modest pace, as labor market conditions remained tight. Hiring was strong in the Richmond, Chicago, St. Louis and San Francisco Districts, while manufacturing layoffs were noted in the New York District. Contacts noted difficulty hiring for a wide range of positions, including manufacturing, health care, and construction.

Read the full Federal Reserve report.
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Tuesday, October 18, 2016

CPI Up 0.3% in September

The Consumer Price Index increased 0.3% in September on a seasonally adjusted basis. Over the last 12 months, the all-items index rose 1.5%, its largest 12-month increase since October 2014.

Prices for all items less food and energy increased 0.1% in September, after rising 0.3% in August. The index rose 2.2% over the past 12 months ending in September.

The food index was unchanged for the third consecutive month. Prices for food at home fell 0.1% in September and have fallen 2.2% over the past year. Prices for food away from home increased 0.2% for the month and 2.4% over the course of the year.

The energy index increased 2.9% in September, rising for the fifth consecutive month, its largest advance since April. All major energy component indices increased.

Higher prices for shelters and gas were the main causes of inflation in September. The gasoline index rose 5.8 percent in September and accounted for more than half of the all-items increase. The shelter index increased 0.4 percent, its largest increase since May.

Read the BLS release.

Builder Confidence Remained Solid in October

The National Association of Home Builders/Wells Fargo Housing Market Index was 63 in October, down from a reading of 65 in September, but still well above the peak of 61 over the prior nine months.

“The October reading represents a mild pullback from a jump in September, and indicates that the housing market continues to make slow and steady gains,” said NAHB Chief Economist Robert Dietz. “Moreover, mortgage rates remain low and the HMI index measuring future sales expectations has been over 70 for the past two months. These factors will sustain continued growth in the single-family market in the months ahead.”

Two of the three index components posted losses in October. The component measuring current sales conditions decreased 2 points to 69, and the index measuring buyer traffic fell 1 point to 46. The sales expectations component rose 1 point to 72.

The regional three-month moving averages for HMI scores increased. The Northeast, Midwest and South each rose 1 point to 43, 56 and 65 respectively. The West rose 2 points to 75.

Read the NAHB release.

Monday, October 17, 2016

Industrial Production Edged Up in September

Industrial production moved up 0.1% in September, after falling 0.5% in August. For the third quarter as a whole, industrial production rose at an annual rate of 1.8%, the first quarterly increase since the third quarter of 2015.

Manufacturing output rose 0.2% in September after falling 0.5% in August. Production of durable goods remained unchanged, but nondurable goods production increased 0.5%. Capacity utilization for manufacturing increased 0.1% to 74.9%, a rate that is 3.6% below its long-run average.

The mining index moved up 0.4% in September. Gains for oil and gas well drilling and servicing, coal mining, and nonmetallic mineral mining more than offset a drop in crude oil extraction.

The utilities index fell 1.0% in September after falling 0.3% in August. Year-over-year, the utilities index fell 0.4%.

Read the Fed release.
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Friday, October 14, 2016

Solid Producer Price Rise in September

The Producer Price Index rose at a seasonally adjusted annual rate (SAAR) of 3.3% in September and were up 0.7% from a year earlier, the U.S. Bureau of Labor Statistics reported today. Excluding the more volatile components of food and energy, the index also rose 3.3% for the month, seasonally adjusted and annualized, and 1.5% from the prior September.

Most of the September rise was due to a 8.1% SAAR increase in the index for goods, while the index for services inched up only 1.1% SAAR. Thirty percent of the September rise in the index for goods was due to a 35.1% rise in energy prices, primarily the price of gasoline.

Read the press release.