Economists' Outlook

Housing stats and analysis from NAR's research experts.

Economic Indicators: Weekly Update for July 22, 2011

Every week the Research staff analyzes key data releases and explain what they mean for you and your business. In this update, we give the highlights of the most important data releases for the week of July 18-July 22, 2011, along with graphs that show the latest movement and overall trends.

At a glance, this table shows the forecast for some of the most pertinent weekly data for REALTORS® to keep in mind. This changes from week to week as new data becomes available.  For the full forecast from the latest Pending Home Sales release, click here (PDF).


Highlights for Monday, July 18, 2011:

  • The 10-year Treasury borrowing rate is at 2.9% .  That is down one point from last week’s rate of 3.1%.  It implies that mortgage rates will be a tad lower this week.
  • The 30-year government borrowing rate is normally only 1 percentage point higher, but is now at 4.25%, which is 1.3 percentage points above the 10-year rate (graph below).  The one strong plausible explanation is that bond investors are getting fearful of distant future inflation.
  • On another economic data note, the National Association of Home Builders index on its member sentiment about the market showed a slight improvement.  The index was 15 in June, up from 13 in the prior month, but a figure of 50 would be considered a neutral outlook.  The latest data is only indicating that things are less bad now than they were a few months ago for homebuilders.


Highlights for Tuesday, July 19, 2011:

  • Housing starts were slightly stronger than expected in June rising 14.6% from May.
  • The bulk of the increase came from the multi-family portion of the index, which jumped 30.4% from a month earlier.  The rental market has been strong in the wake of the housing crisis and recession leading to an expansion of building.
  • Single family construction remains muted, which will help those local markets still wrestling with an over-supply of housing.  However, slow construction hurts the economy as construction is a labor intensive industry, one which shed many jobs during the recession.


Highlights for Wednesday, July 20, 2011:

  • Mortgage applications rose a noticeable 15.5 percent for the week ending July 15, driven by strong refinancing activity.
  • Refinancing activity increased 23.1 percent from the prior week.  Mortgage rates on a 30-year fixed mortgage decreased from 4.55 percent to 4.54 percent during the week.
  • Separately, existing-home sales for June was released and saw a slight decline.  The details are here.


Highlights for Thursday, July 21, 2011:

  • High gas prices and little good economic news continue to take their toll. Jobless claims rose by 10,000 claims in the week ending July 16th. The figure reached 418,000, erasing part of last week’s sharp drop.
  • The Federal Housing Finance Agency (FHFA), the entity that oversees Freddie Mac and Fannie Mae, released its monthly look at home prices. The FHFA’s price index is a same-sale index much like the Case-Shiller index, but it focuses on homes under the conforming limit of $729,250 and is not weighted to capture the more volatile changes as is the Case-Shiller index, and is thus more representative of the national market.
  • The FHFA’s index edged slightly higher in May relative to April, but remains 6.3% lower than May of 2010. The year-over-year price gap peaked in April, though, and receded this month. Outside of the coastal regions of the U.S., prices are up relative to last year.
  • Employment growth remains lethargic, but improved from June. Home sales will remain muted as long as employment growth and confidence are sluggish. Prices, though, are showing signs of bottoming. Home prices slid in the later part of 2010, which suggests that if prices this year remain steady, the year-over-year gap will decline.


Friday, July 22, 2011:

  • The latest state-level jobs data shows the biggest one month job gains in the month of June occurring in Texas (+32K) , California (+29K), Michigan (+18K) and Minnesota (+13K).
  • In percentage terms, the fastest job creating states were in the thinly populated states of Alaska, Vermont, North Dakota, and South Dakota.
  • Housing data clearly shows stronger performance from a strong local job market.  Texas, Alaska, and Dakotas have seen home prices go mostly up and up, despite the national slump.
  • California, Michigan, and Minnesota could soon make inroads to healing and recovery as the new job additions add to housing demand in the state.
  • Two graphs of North Dakota and California are below.



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