Current Climate - The Conference Board Leading Economic Index® increased for the sixth straight month in March, up 0.3%, following a 0.7% increase in February. Forecasts call for continued economic momentum “past the summer months.”
Real Gross Domestic Product - GDP increased at an annual rate of 3.0 percent in Q411 (quarter over quarter). In Q3, real GDP increased 1.8%. The Q4 increase primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), nonresidential fixed investment, exports, and residential fixed investments. Expectations for Q112 are in the 2.5% range. Next release 4/27.
Income and Spending – Income remains flat. Personal income increased 0.2% in February, identical to January, and disposable personal income increased 0.2% compared to a decrease of <1% in January. Nevertheless, Americans are spending more, albeit marginally. The Commerce Department reports that consumer purchases rose 0.8% in March, the most since late 2010. Economists are estimating growth at an annual rate of 2.5% to 3.0% for Q112.
Household wealth in the US climbed from October through December for the first time in three quarters as increases in stock prices outweighed a decline in home values. Net worth increased by $1.19 trillion in Q412 or 2.1%, quarter-over-quarter.
Employment - Based on Bureau of Labor Statistics (BLS) data, employment rose by 120,000 in March and the unemployment rate dropped to 8.2% from 8.3% in February. Jobs were added in the manufacturing, food service and health care sectors. Based on Automatic Data Processing Inc.’s ADP National Employment Report, the private sector added 209,000 jobs in March.
Housing Highlights - All indicators remain positive. Here are the "CliffNotes":
Existing Homes – Existing home sales were at a seasonally adjusted annual rate of 4.48 million in March or 5.2% above the March 2011 pace reflecting nine consecutive months of year-over-year sales increases. On a regional basis, sales were up 15.9% in the Midwest; 5.5% in the Northeast; and 3.6% in the South. The West saw a modest decline of 0.9%, year-over-year.
Total housing inventory declined 21.8% in March, year-over-year, to 2.37 million homes representing a 6.3-month supply at the current pace. Inventory has now declined 41.3% from a record 4.04 million in July 2007. All but two of the 146 markets tracked by Realtor.com reported declines. Markets seeing the largest declines (39% - 52%) include Oakland and Bakersfield, CA, Phoenix, AZ, Miami/Ft. Lauderdale and Orlando, FL, Seattle, Atlanta, and Portland/Vancouver, OR-WA.
The median existing home price for all housing types was up 2.5% year-over-year to $163,800. The median single-family home price was $163,600, up 1.9%, and the median existing condominium price was $165,200, up 7.1%, y-o-y.
Sales Distribution – Distribution remains stable with all cash sales at 32% of all transactions; investor purchases at 21%, and first-time homebuyers at 33%. Short sales have finally outpaced foreclosure sales, accounting for 23.9% compared to 19.7% for foreclosures.
New Construction – Sales of new single-family homes were up 11.4% year-over year in February to a seasonally adjusted annual rate of 313,000. The median sales price of new homes sold in February was up 6.2%, year-over-year, to $233,700 from $220,100 in February 2011. Preliminary estimates by the Commerce Dept. suggest that new home sales rose 1.6% in March to an annual rate of 318,000. Look for the formal release on April 26th.
Permits, Starts, Completions and Pendings – New home building permits reached the highest level since September 2008 in March, rising 4.5% (month-over-month) to an annualized level of 747,000 reflecting a 30.1% year-over-year increase. Housing starts in March were 10.3% higher than one year ago, coming in at an annual rate of 654,000, and housing completions were up 0.5% y-o-y in March to an annual rate of 600,000. Pending home sales eased off <1% in February, but were 9.2% above February 2011. NAR preliminary estimates call for an increase of 1% in March. The next Pending Home Sales Index will be released April 26th. < >
