We saw another week of volatile trading due to a combination of the United States debate being a bit unresolved, foreign debt crisis, anxious investors with losses in the market, and not great performances by tech industries like IBM and Hewlett Packard.
Todd Colvin, vice president at MF Global, explained to the Wall Street Journal, “Investor angst remains very high,” and went on to say, “Good volume associated with a down move typically isn’t a fluke. We’re probably in store for lower prices from here.”
Real estate was a in the news with construction starts for new homes and existing home sales that showed a decrease in the month of July.
As reported by the National Association of REALTORS, existing town homes, co-ops, condos, and single-family home sales dropped 3.5% to an annual rate of 4.67 million in the month of July from seeing a rate of 4.84 million in the month of June. The figures seen last month were 21% higher than what was seen in July of 2010 at 2.86 million sales, which was quite a bit lower after the homebuyer tax credit expired.
Lawrence Yun, NAR’s chief economist stated, “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” and went on to say, “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
When it came to prices, the national median existing-home price for all housing types was $174,000 in the month of July, dropping 4.4% from what was seen in the month of July 2010. Distressed homes, like short sales and foreclosures were 29% of the sales seen in the month of July, whereas in June, it was 30% and in July of 2010, it was 32%.
The Census Bureau reported building permits for privately owned housing units issued in the month of July dropped to an annual rate of 597,000. This figure was 3.2% below what was seen in June at 617,000, but 3.8% higher than July 2010’s figure of 575,000. Permits for single-family in the month of July were at a rate of 404,000, was a bit higher, 0.5%, above the June figure of 402,000.
Privately owned housing construction starts for the month of July decreased to an annual rate of 604,000, which was 15% lower than June’s estimate of 613,000, however it is 9.8% higher than the July 2010 rate of 550,000. Construction starts for single-family homes in the month of July were at a rate of 425,000, which is 4.9% lower than June’s figure of 447,000.
New homes completions increased. Construction completions of privately owned housing in the month of July hit an annual rate of 636,000, which is 11.8% higher than the June estimate of 569,000, and 9.5% higher than the July 2010 rate of 581,000. Completions of single-family housing units in the month of July were at a rate of 470,000, which is 6.1% higher than the June rate of 443,000.
As reported by the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers rose 0.5% in the month of July. Over the last 12 months, prices for the “all-items” index rose 3.6% before seasonal adjustment.
The gasoline index rose in July, which accounted for around half of July’s all-items increase. Groceries saw an overall increase with fruit and dairy prices seeing the most gains.
The index for all items except food and energy rose as well, by 0.2%. The gain was attributed to the shelter index, which gained in July, and the apparel index, which increased as well.
No change was seen in new vehicles or in household furnishings and operations while recreation dropped a tad.
The Census Bureau reported the Producer Price Index for finished goods increased 0.2% in the month of July after seeing a 0.4% drop in the month of June and a 0.2% increase in the month of May. Prices received by manufacturers of intermediate goods inched up 0.2% in the month of July, and the crude goods index dropped 1.2%.
The Employment and Training administration reported first unemployment benefit claims for the week that ended on August 13 reached 408,000, a rise of 9,000 from the prior week’s figure of 399,000. The four-week moving average was 402,500, a drop of 3,500 from the prior week’s average of 406,000.
The figure for insured unemployed workers during the week that ended on August 6 was 3,702,000, a rise of 7,000 from the prior week’s level of 3,695,000. The four-week moving average was 3,716,000, a drop of 4,500 from the prior week’s average of 3,720,500.
New home sales totals
July’s durable goods orders
First jobless claims
Second quarter’s gross domestic product
Consumer sentiment figures for August