By Fred Arnold
I am excited to announce that this week we have had primarily positive news on almost all fronts. The stock market as of this report is up over 300 points for the week. Many investors believe that although Congress has yet to ink a debt deal, confidence remains that our that our elected officials will come through at the 11th hour.
The housing reports this week were filled with some nice surprises. The Housing Market Index showed increased optimism from builders that future demand will increase. Exactly why they feel this optimism is not quite clear however we will gladly accept a positive outlook on housing from anyone at this point.
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Housing Starts jumped 14.6% in June exceeding most analyst predictions. Additionally, housing starts are 16.7% higher than a year ago. Although the biggest jump was in multifamily construction, single family starts rose a healthy 9.4%. Increases in housing took place throughout all regions. The Northeast saw the largest increase of 35.1%. The Midwest increased 25.3%, the South 10.6% and the West rose 5.4%.
Existing Home Sales dropped slightly by a minimal .8%. Despite the slight drop, the good news in this report is that the median home price rose 8.9% in June and prices are slightly higher than a year ago. Without question if we can sustain home prices rising, it will bring buyers into the market as they perceive that we have hit bottom and they better act fast. It is still early and we will need a few more positive reports in the coming months before we can determine if a rising trend actually exists.
Mortgage applications for purchases declined slightly. Many people believe that homebuyers are afraid to make a commitment to purchase a home at this time given the uncertainty of the government negotiations on the debt ceiling, and continued uncertainty regarding unemployment. Unfortunately lately there have been some headlines of layoffs appearing in the media of government employees and Cisco Systems that are scaring buyers. First Time Jobless Claims rose 10,000 from the prior week.
Oil prices have been rising slowly and are sitting at just under $100 a barrel. Since we have seen these oil prices before it is not believed that the rising prices are going to set back the economy however many more consumers are certainly keeping their summer travel plans closer to home to save money.
Economic Reports on tap for this week:
o Tuesday July 26th - S&P Case-Shiller House Value Index, Consumer Confidence & New Home Sales
o Wednesday July 27th -MBA Mortgage Applications and Durable Goods Orders
o Thursday July 28th - First Time Jobless Claims & Pending Home Sales
o Friday July 29th - GDP & Consumer Sentiment
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