Eye on economy - July 10, 2014
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Transcript of Eye on economy - July 10, 2014
Eye on EconomyHome Sales Surge after Slow First Quarter
July 10, 2014
www.eyeonhousing.org
Home sales posted the biggest month-over-month increase in four years
Pending Home Sales Index increased 6.1% in May
PHSI increased in all regions of the country
Existing Sales Rebound
Healthy increase in existing home sales
All four regions increased
Total housing inventory increased
Distressed sales dropped to 11%
First quarter continued to disappoint as the Bureau of Economic Analysis released its third estimate of real GDP
Real GDP contracted 2.9% (seasonally adjusted)
Largely due to declining:
Inventories
Exports
Fixed Investments
Housing contributed 15.6% to Real GDP
Expected to grow in second quarter
Latest estimate of Residential Construction Spending shows slight decrease
In May, private residential spending fell 1.5%
Was up 7.5% from May 2013
Three-month spending average basis:
Single-family — up 12.3%
Multi-family — up 33%
The employment situation improved
Growth in:
Professional & Business Services
Retail
Healthcare
Payroll employment grew 288,000
June unemployment fell to 6.1%
Improvements in labor market are reflected in recent gains in consumer confidence
Consumer Confidence Index reached highest score since January 2008
Rose three points to 85.2
Improved from prior month
Builders remain cautious due to supply constraints including a persistent shortage of labor
Acute shortage of carpenters
Shortage of framing crews
Volatility in employment in specialty trades
Multi-employee companies — decreased 19.4%
One-person firms — declined 3.7%
McGraw Hill Construction surveyed NAHB members about green building
Single-family & Multi-family asked about cost and prevalence of green building
More than 15% of projects are green
Due to increasing consumer interest
Incremental cost to construct green homes was 8% in 2013