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Economic News

New home sales jump 20% for the year, hitting two year high

After news that permits for new home sales were on the rise, the Census Bureau reports sales are also improving – welcome news for this extremely hard hit sector.

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Single family home sales skyrocket

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), sales of single family homes jumped 19.8 percent from May 2011 to May 2012, and prices are on the rise as well, signaling the beginning of a slow recovery for one of the hardest hit sectors in the economy.

Between April and May, new home sales jumped 7.6 percent to a seasonally adjusted 369,000-unit annual rate, hitting a two year high, beating forecasts for the month. The last time sales were this high was when the homebuyer tax credit was fueling sales in spring of 2010.

Some are reserving their enthusiasm for a recovery, however, as sales are barely at 25 percent of their summer 2005 peak, and tight lending combined with extremely competitive pricing of distressed homes continue to hold back the new home sector.

Permits, starts, and builder confidence

According to the U.S. Census Bureau data released last week, home builders applied for permits in May to build new homes at a seasonally adjusted annual rate of 780,000, jumping 7.9 percent above April 2012, and 25 percent above May 2011, hitting their highest rate since September 2008. The increase in permits echoes the increase in builder confidence during the month of May which was at its highest level in five years.

There is a growing disparity, however, between the improving single family sector and the increasingly volatile multifamily sector as actual housing starts for single family rose 3.2 percent for the month while multifamily took a 24.2 percent dive. Overall, housing starts increased 2.85 percent over the year when looking at both sectors together.

Regional performance varied

According to the report, new home sales were boosted primarily by a spike in the Northeast which saw a 36.7 percent increase in sales in May, their highest level in nearly three years, as the South jumped 12.7 percent, reaching a two year high.

Slumping sales of 10.6 percent for the month in the Midwest did not drag down the national numbers, nor did the slight 3.5 percent drop in sales in the West.

The new home sector is expected to continue recovering, but it is certain that after a punishing recession, there is a long way to go in order to reach what used to be “normal.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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10 Comments

10 Comments

  1. Mike Schmidt

    June 25, 2012 at 7:40 pm

    Uh oh. Somebody’s going to call the manse and tell Mitt that the economy’s not all bad.

  2. AgentGenius

    June 25, 2012 at 11:04 pm

    okay, kitten, it’s still DRASTICALLY below where it was pre-crash, calm down 😉 (ps: this is obviously Lani)

  3. LennarCharNC

    June 26, 2012 at 1:19 pm

    @CENTURY21 @AGBeat Great news about rising new home sales!

  4. MaryPopeHandy

    June 26, 2012 at 1:26 pm

    @CENTURY21 @AGBeat Wow, that is an enormous increase! Thx for sharing!

  5. Agent_Directory

    June 26, 2012 at 3:08 pm

    Good news #realestate! RT @CENTURY21 @AGBeat New home sales jump 20% for the year, hitting two year high, reports: https://t.co/ORFMKtSj

  6. Pakistan Real Estate

    June 29, 2012 at 3:43 am

    After facing downfall, the real estate sales are at upward trend in many regions of the world. In Pakistan, the property prices are at an increasing trend. But, the prices are lower then, the past, which means this is the right time to invest, if someone wants to earn huge profits in near future because soon the property prices will be on top.

  7. premlets

    June 29, 2012 at 9:37 am

    This is a very interesting read! I myself am from the UK and we are seeing quite a big drop in house prices rather than a rise! Now I am not clued up on current affairs but the way that our economy is going I cant say I am surprised we are seeing a drop.
     
    As jobs are scarce and money is very tight people are selling up and wanting quick sells rather than waiting around and getting the right price, can’t say I blame them really! Sorry I am rambling………………Being a letting agent myself it is very interesting to read about the worlds current affairs.
     
    Not sure if you guys were affected as much as we were with the recession but it hit us very hard – what are peoples opinions on this? anyone from different coutries finding that their government is reacting in different ways or their economy reacting in different ways?
     
    Thanks for reading this guys
     
    Liam
    Personal Advisor
    https://www.prem-lets.co.uk/

  8. Neilpbohbm2cxq

    July 6, 2012 at 2:16 pm

    @homesandlandman https://t.co/cqNgLJxa

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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