Housing news dominates the headlines this week as the sector tries to stabilize after the harsh winter weather early in the year weighed on the market. Black Knight Financial Services reported today that home prices rose 0.9% from March to April and were up 6.4% year-over-year. Within the report it showed that 19 of the 20 largest states saw month-over-month increases.
The National Association of REALTORS© (NAR) reported that May Existing Home Sales were up 4.9% from April to an annual rate of 4.89 million units. The 4.9% was the highest monthly rate since the 5.5% recorded in August 2011. The report showed that the median home price was $213,400, which is 5.1% above May 2013, while inventories account for a 5.6 month supply. The NAR said that “buyers are benefiting from slower price growth due to much needed, rising inventory levels since the beginning of the year.”
The cost of air conditioning homes across the U.S. is around $11 billion a year with air conditioning accounting for about 5% of all electricity produced in the U.S. There are a few tips to help cut costs. If you have central air conditioning, a shaded area for the unit is the best spot to ensure the highest efficiency. During the cooling period, change the filter once a month so that the unit doesn’t have to work extra hard to cool the house. Closing the blinds and curtains during the peak sun hours will also boost efficiency. In addition, installing ceiling fans will also reduce costs and try to keep the lights off during the long days of sunlight in the summer.
Low home loan rates fueled the surge in mortgage applications in the latest week as the spring buying season nears its end and summer buying begins. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, increased by 10% in the latest week. The refinance index was up 11%, while the purchase index gained 9%.
U.S. Treasury Secretary Jacob Lew said Wednesday morning that the economy is gaining traction and should grow stronger the rest of the year as the nation overcomes the effects of the harsh winter weather. However, Mr. Lew said that millions of Americans are still feeling the impact of elevated unemployment and slow economic growth. The Secretary went on to say that government and the private sector should seek out ways to boost the hiring of the long-term unemployed.
U.S. Stock prices are under pressure today after the World Bank cut its global economic forecast, which included reducing estimates for the U.S. and China. The World Bank reported that its forecast calls for global growth of 2.8%, down from the 3.2% projected in January. Growth of less that 3% is considered to be sub-par. Growth in the U.S. is expected at a tepid pace of 2.1%, down from 2.8%. The U.S. economy expanded at an anemic rate of -1% when the latest reading on first quarter 2014 Gross Domestic Product was released in May.
Construction spending picked up in April due in part to increases in home building and government construction. The Commerce Department reported that construction spending rose by a modest 0.2% in April to an annual rate of $953.5 billion, the strongest performance since March 2009. Construction spending had decreased by 0.4% in January, due to the harsh winter weather, but has picked up in recent months as the warmer weather unfolds.
The U.S. Stock markets finished with record highs on Friday as the closely watched barometer for Stocks, the S&P 500, closed at 1,923.57. The low interest rate environment that the Federal Reserve has been fostering, has been a boon for the Stock markets. The S&P 500 hit a multi-year low of 666 back on March 9, 2009 at the height of the recession, a 188% gain.
The manufacturing sector took a minor setback in May as business expansion slowed a bit. The ISM Manufacturing Index fell to 53.2 from the April reading of 54.9, but readings above 50 indicates expansion. The survey showed that 17 of the 18 sectors showed growth last month with just one said business was flat. Within the survey it showed that the employment component fell to 51.9 from 54.7 in April.