Pollack: Conditions good for home refis or sales

Pollack

The Monday Morning Quarterback: A quick analysis of important economic data released over the past week

U.S. Snapshot

The national Blue Chip Consensus expects real GDP to pick up.  Expectations are that 2013 real GDP will grow by 1.6% and that 2014 will expand by

2.6%.  That’s still not up to the average for expansion years over the last two decades, but, it will be the highest rate of growth in nearly a decade.  Growth will likely be led by business fixed investment, housing and, to a lesser degree, personal consumption expenditures.

Consumer credit grew at a slightly slower pace in July than in June.  Total credit outstanding was up in July at a 4.4% annual rate.  But, revolving credit declined at a 2.6% annual rate while non-revolving credit was up at a 7.4% annual rate.

The consumer took a breather in August after lots of shopping in July.  Retail sales increased 0.2% in August after a 0.4% gain the month before.  Market expectations were for a 0.5% increase.  Autos jumped 0.9% after a 0.5% dip in July.

Consumer sentiment fell to 76.8 from 82.1 in August according to the University of Michigan.  The cause of the weakness, given mostly steady economic news, is difficult to determine.  The decline is expected to be transitory.

Arizona Snapshot

According to CoreLogic’s Negative Equity Report, the percent of homeowners with mortgages that are under water in the state dropped from 39.7% in the 2nd quarter of 2012 to 24.7% in the 2nd quarter of 2013.  For Greater Phoenix, the number dropped from 41.9% to 25.6%.  Nationwide, homeowners with negative equity dropped from 22.3% to 14.5%.  Thus, the state not only made huge strides over the last year, but, it did so at a rate that far exceeded the progress made in the nation as a whole.  As home prices in the state continue to increase, it will allow more homeowners the opportunity to refinance or sell their home, putting them in a more stable financial position.

Other Greater Phoenix real estate data continues to be positive, albeit less so than in the past few months.  Listings are up a modest 1.3% from a year ago.  Total sales are down moderately as well.  And while prices were modestly down from July to August, they are still up considerably over the last year.  New home prices are up 23.7% over the last year.

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