U.S. Existing-Home Sales Rise at Fastest Pace Since 2007 Sales of existing homes rose to their highest level in more than nine years and prices climbed to a new peak in May, the latest sign of rising demand amid steady job creation and low interest rates.
Sales climbed 1.8% in May from the prior month to a seasonally adjusted annual rate of 5.53 million, the National Association of Realtors said Wednesday. That was the strongest pace since February 2007. April’s sales figure was revised down to 5.43 million.
The national median sale price for a previously owned home, meanwhile, was $239,700, up 4.7% from a year earlier and the highest figure recorded by the Realtors’ group. (…)
In 2015, existing-home sales came in at a pace of 5.25 million, the highest level since 2006. (…)
The Realtors’ group said there were 2.15 million existing homes available for sale at the end of May, down 5.7% from a year earlier. That is a 4.7-month supply at the current sales pace. (Charts from Haver Analytics)
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Despite a Housing Recovery, Middle-Income Families Are Increasingly Losing Ground on Affordability Some 40 million American households are paying more than a third of their incomes on rent
An annual report from Harvard University’s Joint Center for Housing Studies, theState of the Nation’s Housing, reveals that even while the housing market begins to recover and regain solid footing, large parts of the country are being left behind.
The number of American households paying more than 30% of their incomes on housing – a number that economists consider sustainable — ticked up to nearly 40 million in 2014. That is particularly concerning because that number had been trending down for three years, suggesting the rental affordability crisis persists despite recent income growth. Middle-income families are increasingly losing ground, facing housing affordability challenges that were once largely limited to the poor. In the 10 highest-cost housing markets, half of renters earning $45,000 to $75,000 a year in 2014 paid at least one-third of their incomes in rent.
One reason middle-income renters are struggling to find an affordable apartment:Developers are catering to a growing number of affluent renters. While newer rentals have always commanded higher prices than older units, the premium for new apartments has risen sharply, the Harvard report finds. The median asking rent for new apartments built in 2015 was $1,381 per month, more than 70% higher than the overall median rent. The rent premium for new studio apartments was even more stark, at 90% above the overall price for a studio. (…)
The report also finds that the number of families living in poor neighborhoods has more than doubled since 2000, to nearly 14 million. A quarter of poor blacks live in poor neighborhoods and 18% of poor Hispanics, compared to just 6% of poor whites.
Millions of U.S. Consumers Are Escaping Subprime The percentage of Americans with subprime credit scores has fallen to the lowest in more than a decade, a development that could give bank lending and the overall economy a boost.
The share of U.S. adults with credit scores that are considered “subprime” fell to 20.7% in April, the sixth consecutive year-over-year decline and the lowest level since at least 2005, when Fair Isaac Corp., or FICO, started tracking the data. The ranks of subprime borrowers swelled during the financial crisis, peaking at 25.5% in 2010 as mortgage payments, credit-card bills and other debts went unpaid. (…)
Meanwhile, as credit scores are rising, defaults are near record lows. Some 0.81% of consumer loan dollars—including mortgages, auto loans and general-purpose credit cards—were in default as of May, the lowest level in records going back to 2004, according to the S&P/Experian Consumer Credit Default Composite Index. This is down from 0.88% a year ago and a peak of 5.51% in May 2009. Much of that improvement is due to plummeting mortgage defaults in recent years. (…)
Some 11.8% of borrowers were 90 days or more past due on at least one debt obligation during the 12 months through April, down from 13.3% during the 12 months through October 2013, according to FICO. (…)
U.S. household debt was equal to 102% of disposable income at the end of the first quarter, Fed data show, down markedly from a peak of about 130% in late 2007.
Philadelphia Fed Index of Nonmanufacturing Business Activity Moves Sideways; Prices Surge
For a third month, the Federal Reserve Bank of Philadelphia reported that its Index of Nonmanufacturing Sector Activity at the company level was fairly steady. The index level of 17.6 compared to 18.2 in May and 17.8 in April, each little changed following a decline to 17.5 in March. The measure has been declining since early last year. The expectations index for general activity also deteriorated to the lowest level since February.
Weakness in the overall reading was led by a lower new orders component, which was the weakest since last July. The inventories series also fell sharply showing little accumulation after robust readings in the prior three months. Order backlogs also expanded at a greatly reduced rate and shipments growth eased.
Countering these deteriorations was improvement in hiring, where the full-time permanent employee index rose to its highest level since October. That was accompanied by a decline in the part-time employment series. The wage & benefit cost index remained steady after strengthening in April.
The index of prices paid surged to the highest level in 12 months. Thirty percent of respondents reported higher prices paid while four percent paid less. The index of prices received rose slightly m/m.
China bankruptcies surge as government targets zombie enterprises After years of reluctance, courts join campaign against overcapacity and debt
Courts in China accepted 1,028 bankruptcy cases in the first quarter of 2016, up 52.5 per cent from a year earlier, according to the Supreme People’s Court. Just under 20,000 cases were accepted in total between 2008 and 2015. (…)
Industrial robot sales hit record Double-digit global rise led by China
The surge was driven by companies installing machines not only in advanced countries but also emerging economies, according to research by the International Federation of Robotics.
It found that 248,000 units were sold last year, an increase of 12 per cent, with more than one in every four of those going to China. Once the manual labour “workshop of the world”, the country is today the largest buyer of industrial robots.
(…) in 2014, the country had just 36 robots for every 10,000 people employed in the manufacturing sector, compared with 478 in South Korea.
U.S. Gasoline Demand Zooms to Record as Prices at Pump Plummet
Consumption has risen 3.9 percent from a year ago, while the average retail price for the motor fuel has tumbled 17 percent, according to data released Wednesday by the Energy Information Administration and AAA. (…)