Posted on 11/20/2006 9:47:58 PM PST by GodGunsGuts
AP Home Sales Plummet in 38 States in 3Q
Monday November 20
By Lauren Villagran, AP Business Writer
Third-Quarter Home Sales Plummet in 38 States During the Summer; Home Prices Also Tumble
NEW YORK (AP) -- The feeble U.S. housing market showed more frailty when third-quarter home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.
The once-booming real estate market's persistent weakness over the past year has reined in expectations for economic growth but hasn't been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.
The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.
Home prices also dropped: The realtors' survey showed that the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.
Meanwhile, the latest report of building permits showed the slowest pace of annual growth in nine years in October. Housing construction slid sharply as builders tried to curb swelling inventories of unsold new and existing homes.
Stuart Hoffman, chief economist at PNC Financial Services Group, said he thinks the housing market still hasn't reached its low point.
"I think the permits numbers point to yet another flight of stairs down on housing before we hit the basement," he said. "On the other side, stocks are rising, consumer confidence is good and jobs are rising. Those factors are keeping this decline in housing contained."
A closely watched indicator of future economic activity release Monday provided further evidence of that trend.
The Conference Board, an industry-backed research group based in New York, reported Monday that its Index of Leading Economic Indicators rose 0.2 percent in October. Increased real money supply and improved consumer expectations helped offset the sharp decline in housing permits and weaker vendor performance.
"The economy is growing more slowly, but we have yet to have weakness spread beyond housing and motor vehicles to such a degree that we need to fear the proximity of a hard landing," said John Lonski, chief economist of Moody's Investor Service, referring to when the economy turns from growth to a recession.
The housing market slowdown has weighed on the leading indicators index this year. But all told, strengths and weaknesses in the leading indicators have been roughly balanced, according to the Conference Board report. The index stood at 138.3 versus 139.1 in January -- its peak so far this year. The index has declined four of the last seven months.
The Conference Board's labor economist, Ken Goldstein, said the October index suggests "the economy is unlikely either to reheat or to get significantly cooler."
"Instead, the kind of slow growth now being experienced could continue right through the winter and into the spring," Goldstein said.
In another sign of moderating economic growth, the Federal Reserve held its benchmark interest rate steady last month at 5.25 percent for the third straight session. The Fed had raised interest rates 17 times beginning in June 2004 to stave off inflation, before halting its campaign of credit-tightening in August.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
No, the sky is not falling...but Housing is.
Lots of stuff sitting and going nowhere in California.
As those no interest loans and other crazy loans need refinancing, the sky will indeed fall IMO.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
They are not doing away with them because what we are witnessing (and will continue to witness) is totally independent of party politics. The numbers are the numbers.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
These stories are based on the numbers. Sure people can try to spin them to their own advantage. But as I said, the numbers are the numbers.
Is that ever the truth!
Why wont prices in NYC fall? Wall St. money I suppose. It is just bizarre.
WASHINGTON - Housing construction plunged in October as builders slashed activity to the lowest level in more than six years.
http://news.yahoo.com/s/ap/20061117/ap_on_bi_go_ec_fi/economy
Interesting that they choose words like "plummet" instead of fall or drop off. Almost like someone has an agenda.
Maybe some of the illegals will go home.
I don't understand why my house couldn't continue to tripple in value every three years for ever. The sky must be falling.
Amen to that!
I would say a 12.7 percent decline year over year qualifies for the word plummet.
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