This Bloomberg story is consistent with our current thesis: that despite the buoyancy of the stock market, conventional wisdom has it that a “recovery” is on and that the economy is on firmer footing than it really is. Note that the existing homes sale release fell below the low end of forecasts among the economists that Bloomberg surveyed earlier in the week. And this occurred despite the fact that some commentators though there was risk that warm weather early in the year led to an acceleration of the peak selling season, and strong looking performance in the spring would come at the expense of activity over the summer.
Home purchases slid 5.4 percent in June to a 4.37 million annual rate, an eight-month low, figures from the National Association of Realtors showed today in Washington….
The median forecast of 76 economists surveyed by Bloomberg News called for a 4.62 million pace of existing home sales. Estimates ranged from 4.42 million to 4.75 million.
Slower job growth, stricter lending standards and competition from cheaper distressed properties may be impeding the market even with mortgage rates at all-time lows. The drop in home values since the last recession has also left many owners owing more than their property is worth, limiting their ability to relocate.
“Given that hiring has slowed down over the last few months, I don’t think it’s surprising we’re seeing sales soften,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Buyers are hesitant because they didn’t want to buy a home and see it depreciate within a year.”…
More Americans than forecast filed first-time claims for unemployment insurance payments last week, reflecting volatility induced by the annual auto-plant retooling period.