While most housing markets nationwide are still struggling this year, forecast data for 2011-2013 suggests Raleigh, NC has some positive things to look forward to.  We bring you this insight courtesy of our forecast reports available through Housing IntelligencePro.

Why Raleigh?  The underlying employment and demographic data tell the story.  Raleigh enjoys steady growth in population and households at a rate just over 3%, and in our forecast window of 2011-2013 non-farm employment should increase on average of 3.5% a year and median household income should increase 5% a year.

A diverse economy and stable employment from the technology, health care, education, and government sectors lay a positive foundation.  These factors contribute to Raleigh scoring comparatively well in our Market Health Report (available through Housing IntelligencePro).  Raleigh also leads the Top 100 largest MSAs over 2011-2013 in average Housing Growth Ratio, a measure of construction activity in the form of annual residential permits issued per 1,000 residents, which also happens to be our Data Feature of the Week.

In broader economic news, two separate reports released this week showed the continued troubles facing the national economy and housing market in the near term.  According to foreclosure tracking firm RealtyTrac, foreclosures of U.S. homes are now at their highest levels since the housing and economic crisis began.  Banks reclaimed 95,364 in August which is up 3% from the previous month and 25% higher than August of last year.

The unemployment rate remains stubbornly high and income trends are weak.  Employers are still hesitant to hire due to expectations of slower growth in the coming months along with fears of a double-dip recession, that is if one could successfully argue we ever truly got out of the first dip.

The Economy
A Census Bureau report shows that the U.S. poverty rate for 2009 increased to 14.3% in 2009 which is the highest it has been since 1994.  Nominally, there are 43.6 million Americans below the poverty line which is the highest number on record.  The government defined the poverty line as less than $21,954 for a family of four in 2009.

First-time unemployment claims this past week declined for the fourth straight week.  Initial jobless claims dropped by 3,000 to 450,000 in the week ended September 11th.  First-time jobless claims are now at their lowest levels since the week ended July 10th.  The recent drop and stabilization in first-time unemployment claims is a positive sign for the U.S. labor market although further declines in the coming weeks would be necessary to suggest a long-term positive trend.

Retail sales in the U.S. posted its largest increase in five months in August.  The Commerce Department reported that retail sales increased 0.4% from the previous month and was driven by back-to-school shopping.  This was the second straight month in which retail sales have increased.  Consumer spending is very important to the continued expansion of the U.S. economy since it accounts for more than two-thirds of GDP.

Housing Market
National average mortgage rates increased from the previous week to 4.37% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on September 16th.  This is the second straight week that mortgage rates have increased.  Despite gains over the past two weeks, mortgage rates are still just slightly higher than record-low levels.

In the week ending September 10th, the MBA’s seasonally-adjusted purchase index increased a slight 0.43% from the previous week and was down 32.69% compared to the same time last year.  This is the first decline for the purchase index in the past four weeks.  The index remains near its lowest levels in nearly 14 years.

For market-level data and analysis please visit our website at http://www.hwmarketintelligence.com.  For more detailed information on the indicators discussed in this key indicator alert, please visit the following links: