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Economics
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Written by Jonathan Dienhart
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11.20.2009 |
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A sharp drop in housing starts and building permits raised further concerns about a recovery in the housing market, spurring a three day sell-off in equity markets. The plunge in building activity, however, was at least partially attributable to the anticipated expiration of the original federal homebuyer tax credit at the end of November. The tax credit has since been extended and expanded to include existing primary homeowners as well. Though financial markets viewed the figures with pessimism, starts and permits are a measure of supply only. While it may not be encouraging to see supply so low, it’s not an entirely bad thing to have these levels remain subdued until sales activity improves more substantially. Adding additional units to the market not supported by demand would only result in further price declines. | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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11.17.2009 |
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Despite extremely low mortgage rates and an ongoing home buyer tax credit, the pace of mortgage applications slowed substantially in recent weeks. And while existing home sales seem to be improving, likely as a result of foreclosure and bank-owned property sales, new home sales have not shown quite the same hopeful signs of recovery. As a possible result, housing starts in October declined more than expected, suggesting home builders are being wisely cautious at adding additional supply to the fragile market. | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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11.12.2009 |
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Last weekend, the G20 stated that they would continue to support global economies which caused stocks to jump earlier in the week. The G20 finance ministers said they would maintain their current plan to stimulate their respective economies with emergency support initiatives although many nations are already recovering. The plan to keep pumping money into the global system in order to spark growth is seen as a positive sign for businesses by most equity markets, and shows the commitment of the world’s largest economies to the current monetary policy strategy. | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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11.06.2009 |
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The homebuyer tax credit extension and several key credit upgrades of blue chip stocks fueled investor optimism on Friday, but were countered by October employment figures that came in worse than most economists had forecasted. Continued job losses have pushed the U.S. unemployment rate to its highest levels in 26 years, presenting a challenging obstacle to broad economic recovery. The three major stock indices have been volatile in morning trading but are all trading roughly flat around noon. | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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10.30.2009 |
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Financial markets have been a scary place of late, the bullish sentiment driving the market rebound since March seems to have subsided as we head into the final two months of the year. As each economic indicator sheds additional light on the pace of economic recovery (or lack thereof), there has been a furious level of data dissection to determine whether the headline conclusions of each news release really speak to economic growth (the treat) or are perhaps concealing evidence of continued weakness (the trick). | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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10.22.2009 |
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Existing home sales in September posted their largest monthly gain in over 14 years as consumers rushed to take advantage of the soon-to-expire federal homebuyer tax credit. There is now very little time left to take advantage of the credit which is set to expire in just a little more than a month. There is a substantial lobbying effort underway to have the tax credit extended into next year with several bills and proposals currently under consideration. However, the extension has come under even more scrutiny recently as reports of fraud related to the tax credit have emerged while many debate what its cost would have on the current budget deficit. The tax credit has been effective at propping up home sales and drawing potential homebuyers off the sidelines in recent months, and there is speculation abound as to how much the pace of sales could drop off once the program ends. Should sales slow substantially, as was the case with auto sales when the “Cash for Clunkers” program expired, it could cause new destabilization in the fragile U.S. housing market. The debate will likely become even more heated as a decision on the extension is expected in the coming weeks. | | No comments for this item |
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Economics
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Written by Jonathan Dienhart
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10.19.2009 |
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A small increase in multi-family permit issuance in September was not able to offset the unexepected 3% seasonally-adjusted monthly decline in single-family permits during the same month. In total, residential construction permits were off by 1.2% from August, not a huge decline but one not expected by Wall Street, and not a welcome one when many in the industry are looking for a more signs of stabilization. While permits are a measure of supply, they tend to be a reflection upon the sentiments of home builders in assessing upcoming housing demand. | | No comments for this item |
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