he Monday Morning Quarterback: A quick analysis of important economic data released over the past week
ELLIOTT D. POLLACK & Company
Most of the interesting data this week concerned housing. On a national level, sales of existing homes rose in July even with constraints of affordable inventory. The national median home price had its fifth consecutive month of year-over-year increases. July sales were up over 10% from a year ago and were up 2.3% over June. These were in line with expectations. While the market is aided by very low interest rates that are helping to unleash pent-up demand, the market is constrained by very tight lending standards. Sales of new single family homes in July were up over 25% from July 2011 and were up 3.6% over last month. The median sales price in July was $224,200.
Housing data for the Greater Phoenix area was also very positive. According to R.L. Brown, 1,303 new single family permits were issued in Greater Phoenix in July. This was an increase of 108.8% over July 2011. While this gets Greater Phoenix to a level of new housing that is about half the norm, it is a significant improvement from the past few years and will result in an increase in construction and other housing related jobs that are very important to the recovery of the area’s economy. New home closings were 753 in July- a gain of over 54% from a year ago. Year to date, closings are up 41.3%. Resales were down 7.6% to 7,580 units in July. This is still a high level of resales. The median price of a resale home us up over 33% from a year ago. This is good news since fewer existing homeowners will be under water and will be more likely to benefit from the positive wealth effect. While the Arizona Regional Multiple Listing Service (Great Phoenix) reports that listings are down by a third from a year ago, listings have been stable over the past few months.
Other data reported last week include initial claims for unemployment insurance. This indicator was flat, as it has been over the past several weeks. The number in a normal economic recovery would be declining. New orders for manufactured durable goods increased 4.2% last month (July 2012) and now stand4.9% over a year ago. However, durable goods orders excluding transportation were actually down 0.4% after a decline of 2.2% last month.
For Arizona, retail sales in June were up 1.2% over the prior month and now stand 6.8% over a year ago. Results for Greater Phoenix were 0.3% and 7.7% respectively.
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