Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage purchase applications and the ADP Employment Report.
According to the latest REALTORS® Confidence Index survey, the levels of buyer and seller traffic are closer together than was the case at a similar time in two of the past three years. Buyer interest is relatively flat, while sellers appear to be waiting to list homes in anticipation of better markets. This seems to indicate the potential for increased stability in the residential home sales markets, although at price and sales levels below previous expectations. The residential markets appear to be waiting for improved economic and jobs conditions.
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the Case-Shiller price index and consumer confidence.
The tough economy and the high unemployment rate have provided little opportunity for wage increases in the past two years. The hourly earnings of those workers in non-supervisory positions have risen by 2.3 percent from one year ago to July. That is a full percentage point below the 20-year average in annual wage increases of 3.3 percent.
At the same time, the costs of purchasing day to day items have been rising recently, despite the economic weakness, due to plenty of printed money. The most recent consumer price index rose by 3.6 percent from one year ago to July. In short, Americans are falling behind in their standard of living. For the next two years at least, it is unlikely that wage growth will increase in any measurable way. Consumer prices, however, can quickly change along with swinging oil prices. If oil prices were to fall by another 10 to 20 percent to about $70 per barrel, then it is possible for consumer price inflation to retreat below wage growth.
Unemployment, as terrible as it is, impacts about 10 percent of the workforce. Wages and inflation, however, impact 90 percent of the workforce. That is one key reason why consumer confidence is struggling to recover.
According to the latest REALTORS® Confidence Index survey, approximately one out of three buyers makes a down-payment of 20 percent or more on a home. The data indicate why we are concerned about proposals that would require minimum down payments of at least 20 percent: most people don’t reach that level. For a a first-time median income home buyer to buy a $150,000 home, well below 2010’s median price of $172,900, a 20 percent down-payment of $30,000 would be a major stretch.
The level of down-payment appears to be much less important than the credit-worthiness of the purchaser. As noted by NAR’s Chief Economist Lawrence Yun, after World War II approximately 4 million veterans purchased homes through the Veterans Administration with zero down-payments, and there were no major credit issues.
- Most NAR members do not have personal assistants—only 17 percent have personal assistants.
- However, assistants are most common among those who had over 15 transaction sides in 2010. Among members who had 21 to 50 transactions, 39 percent had at least personal assistant. Among members who had 51 transactions or more, 69 percent had at least one personal assistant.
- For more information on the Member Profile, click here.
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights consumer spending.
According to the latest REALTORS® Confidence Index survey, foreclosure sales continue to decline at the back-end of the foreclosure process—the point at which the property enters the MLS listings and is finally sold to a new buyer. This seems to indicate that banks are feeding foreclosures into the market on an ongoing but orderly basis, which should reduce the possibilities of future major price declines due to the dumping of distressed properties on the market. Assuming that the economy continues its expansion (an assumption supported by available economic data although a subject of intense interest) the information on distressed sales indicates that while the currently high level of distressed sales will probably continue to have negative impacts on price, the situation should not get worse.
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 August 22-August 26, 2011, along with graphs that show the latest movement and overall trends.
Seven Out of Ten Renters Say Owning a Home is a Top Priority
This is a guest blog post by Lora McCray, NAR’s Manager of Housing Opportunity.
Last month the NAR’s Housing Opportunity program released the findings from its 2011 Housing Pulse Survey, which is an annual survey we conduct to gain information on consumers’ attitudes and concerns about affordable housing. We wanted to get a sense, particularly in the current economy, of people’s attitudes about affordable housing opportunities and homeownership and what they expect to see in the future.
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