Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
While 2014’s existing home sales were slightly down, sales in December picked up steam, as did new home construction. Meanwhile, initial jobless claims fell, but not as far as the market had hoped.
Existing Home Sales
The pace of existing home sales rebounded last December, with transactions of single-family homes, townhomes, condominiums and co-ops rising 2.4 percent from November to an annual rate of 5.04 million, the National Association of Realtors reported last week.
Looking at the year in total, 2014 saw 4.93 million home sales, a 3.1 percent decline from 2013’s 5.09 million sales. That dip was chalked up to early lackluster activity that negatively impacted 2014’s overall performance. But while volume was down, prices hit their highest level since 2007. The national median existing-home price for 2014 hit $208,500, which marked a 5.8 percent gain over 2013’s median price of $197,100.
“Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated,” said NAR Chief Economist Lawrence Yun, summarizing the year. “Sales were measurably better in the second half — up 8 percent compared to the first six months of the year.”
Shifting back to December performance, total housing inventory for the month dropped 11.1 percent to 1.85 million existing homes for sale, which represented a 4.4-month supply at December’s sales rate. This was down from November’s 5.1 months and just 0.5 percent lower than December 2013’s 1.86 million.
Not surprisingly, that inventory drop had an effect on prices. December’s median existing-home price hit $209,500, which was 6 percent higher than December 2013’s median price, and marked the 34th straight month of year-over-year price increases. That’s a concern given that wages are not keeping pace with the real estate market, according to Yun.
“A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4 percent interest rates,” he explained.
New Home Construction
While existing home inventory might have dipped, new home construction, especially for single-family homes, saw healthy gains in December. Building permits issued in December for the construction of private housing hit an annual rate 1,032,000, which marked a 1.9 percent gain over November, and a 1 percent increase of December 2013, according to last week’s report from the Census Bureau. Permits for single-family homes issued in December hit a 667,000, which was 4.5 percent higher than November and the highest point since mid 2008.
“The strength is where you’d like to see it, in single-family housing,” Societe Generale senior U.S. economist Brian Jones told Bloomberg. “It bodes well for residential real estate. It’s another thing going in the right direction for the economy.”
Starts on construction of private housing in December rose to an annual rate of 1,089,000, which was 4.4 percent over November’s revised pace of 1,043,000 and 5.3 percent higher than the December 2013 rate of 1,034,000. Starts on single-family homes in December shot up to a rate of 728,000, which was 7.2 percent higher than November’s revised rate of 679,000.
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed dropped, but not as far as expected, according to last week’s numbers from the Employment and Training Administration. Initial jobless claims filed during the week ending Jan. 17 dropped to 307,000, a decline of 10,000 from the prior week’s revised level of 317,000.
Employment watchers had expected 302,000 claims. The question on many analysts’ minds was whether the third week in a row of jobless claims over the 300,000 mark was indicative of any trend, or merely the lingering impact of holiday hire layoffs
“It has to do with noise surrounding the end of the holiday season,” RBS Securities Inc. economist Guy Berger explained in a Bloomberg interview. “There isn’t any real sign that layoffs are picking up in any real sense. It seems like the labor market is entering 2015 in pretty good shape.”
The four-week moving average, which is considered a more reliable measure of jobless activity, hit 306,500, an increase of 6,500 claims from the preceding week’s revised average of 300,000.
Economic News in Review Greenville SC
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