Demand for Housing Could Cool in August, Report Says
Redfin has created a forward-looking read on the housing market that it plans to issue monthly. It looks at the number of people viewing listings on its website, customers requesting tours and those writing offers in the 15 major metro areas in which it has a large presence. (…)
This is the first time that Redfin has released the index, but it has looked at data going back to January 2013. In June, it showed year-over-year price growth of 5.7% and growth in sales of 14.2%.
Brokers said that they are starting to see prices keep clients out of the market, who are deciding to stay renters because they can’t afford homes or don’t want to get into a bidding war.
From the horse’s mouth:
The Demand Index, an early indicator of housing-market performance, is based on millions of visits to Redfin.com home-listing pages, and thousands of Redfin customers requesting home tours and writing offers in 15 major metro areas. It is scaled to equal 100 on January 2013, which is the first month of the estimation period. The Demand Index is adjusted for Redfin’s market share growth.
The Demand Index debuted today at a level of 113, up 13 percent year over year, the smallest increase since January. In 2015, the Demand Index followed a similar seasonal pattern to previous years, increasing from January to April, then beginning to decline. However, this year’s 6.7 percent decline from May to June is steeper than the 3.9 percent decrease for the same period in 2014. Over the past 30 months, the Demand Index has averaged 103.
Redfin forecasts that year over year, home prices will be up about 4.3 percent in July, and just 2.2 percent in August.
This year’s seasonal slowdown is more extreme than normal due to buyer fatigue over high prices and low selection, combined with gradually increasing mortgage interest rates. Buyers are still in the market, but they’re setting boundaries on what they’re willing to pay. (…)
Two major factors driving the forecasts are fewer people making offers and lower list prices for homes going under contract.
Homebuyers are still touring in force, but they’re more price sensitive. Fewer are making offers, and when they do, they’re buying less expensive homes. The median list price of pending homes fell by $10,000 to $300,000 in just the last two weeks.
Unlucky Emerging Markets Don’t Get Lift From Weak Currency The bright side of a currency decline is supposed to be rising exports. But in key emerging markets around the world, that isn’t happening.
Currencies in some countries are hitting new lows, down as much as 30% in the past 2½ years. Meanwhile, emerging-market export growth has fallen to its lowest levels in more than half a decade. Exports themselves fell 14.3% year over year in the three months through May, the biggest decline since 2009, according to Capital Economics.
But weak growth in the U.S., Europe and China combined with lower commodity prices wiped out any hoped-for bounce. Now with U.S. interest rates set to rise, investors are pulling out, pushing currencies down further and leaving nations from Indonesia to Brazil scrambling to shore up their economies.
Problem is, prices of the stuff they sell are falling faster than their currency…
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Metal Prices Fall to Multiyear Lows -
Gold Snaps Losing Streak, Silver Lowest Since 2009
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Oil Prices Enter Bear Market
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U.S. Corn, Soybeans Slide
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Anglo American to Slash 53,000 Jobs Anglo American reported a $3 billion loss and said it would cut 53,000 jobs, or about 35% of its workforce, over the next few years as plunging commodity prices wreak havoc on the bottom lines of miners.
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Lonmin Plunges on Funding Concern; Plans to Cut 6,000 Jobs
The lower euro is not helping German exports either:
Markit’s gauge of German manufacturing growth unexpectedly cooled in July as exports fell for the first time in six months. The factory index slipped to 51.5 from 51.9 in June, missing economists’ forecast for an unchanged reading. An export index fell below the key 50 level for the first time since January, indicating a contraction. (BloombergBriefs)
Lowflation and weak demand is also impacting the U.S.:
Here we come to an ugly possibility — the world may be closer to a downturn than is commonly thought. The 0.9% year-over-year rise by the sum of the sales of US manufacturers, retailers, and wholesalers during the year-ended June 2015 included a -1.9% yearly drop for Q2-2015. Comparable deteriorations by business sales previously occurred in November 2008 through January 2009 and August 2001, where both incidents overlapped recessions. (Moody’s)
EARNINGS WATCH
At the half, the score is pretty good:
- 173 companies (49.7% of the S&P 500’s market cap) have reported. Earnings are beating by 5.8% (5.3% last Wednesday) while revenues have positively surprised by 0.3% (0.5%).
- The beat rate is 76% (74%). Ex-Financials: 80% (77%).
- Expectations are for revenue, earnings, and EPS of -3.7%, -1.3% (-2.1%), and +0.1% (-0.6%). EPS growth is on pace for 3.0% (2.7%), assuming the current 5.8% beat rate for the remainder of the season. This would be 7.9% (7.4%) on a trend basis (ex-Energy and the big-5 banks). (RBC Capital)