Finance Matters

Posts Tagged ‘fall’

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Munich-based Ifo think tank has today revealed confidence among German firms fell for the third consecutive month in September.

The closely-watched Business Climate Index dipped to 107.5 this month from August’s reading of 108.7 – this represented the lowest level since June 2010.

However, the fall was not as bad as the 106.5 economists had expected.

The fall was attributed to the ongoing debt crisis in the euro zone which could impact on the wider economy.

Ifo surveys around 7,000 German manufacturing, construction, wholesale and retail companies each month.

Commenting on the data, Ifo President Hans-Werner Sinn said: “The business expectations for the coming half year once more deteriorated markedly.”

However, one analyst said the figures suggest that Germany will not fall into a recession.

Meanwhile, a sub-index on expectations also edged lower to 117.9 from 118.1 in August – but again this was less than forecast.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

Last week, the European Commission slashed its growth forecasts for the euro zone and warned that the 17-member nation may come “close to standstill at year-end.”

Furthermore, the Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

HM Revenue & Customs (HMRC) has today revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Today’s figures, along with other recent reports, suggest the housing market will remain depressed throughout 2011 due to economic uncertainty and ongoing mortgage restrictions.

Earlier this week, the Council of Mortgage Lenders (CML), which represents lenders who offer around 94% of all residential mortgage lending in the UK, reported UK mortgage lending grew in August.

According to the Council, lending was 6% higher in August on a monthly basis. However, approvals are running at around half the level seen prior to the financial crisis.

However, despite the encouraging figures, the CML said activity is subdued but broadly stable.

Howard Archer, chief UK economist at IHS Global insight, cautioned that although activity within the housing market had improved of late, it is still low compared to “long-term norms”.

For that reason, he believes house prices are likely to fall by around 5% overall from current levels by mid-2012.

He adds that consumer confidence is low due to uncertainty surrounding the economy and therefore buyers are adopting a wait and see approach.

In related news last week, the Royal Institution of Chartered Surveyors (Rics) reported that the UK housing market remained weak in August with house prices falling further.

The Rics report said 23% of surveyors reported house prices fell rather than rose – this reading has been in negative territory for more than a year.

Meanwhile, surveyors remain negative about the direction of future house prices with 23% more surveyors expecting prices to fall rather than gain over the next quarter.