Richard Nixon used to say, “Let me be perfectly clear about this…” And so I wonder about the clarity in a release that came across my desk this week: Recent data indicate a slowdown in economic activity for the remainder of 2012, yet modest growth is still expected, according to Fannie Mae’s Economic & Strategic Research Group. What?
Consumer spending has weakened in recent months as the consumer confidence index fell to the lowest level since January. Contributing to the downturn is an uncertain job market. The June employment report showed significantly fewer hires compared to the first quarter monthly average, and ongoing concern regarding the European debt crisis and domestic financial markets may suppress a meaningful increase in private payrolls before the end of the year. In light of these trends, the group has revised down the 2012 gross domestic product (GDP) growth projection from 2.2 percent to 2.0 percent.
“The data from the past month collectively point to decelerating economic growth, but growth nonetheless,” says Fannie Mae Chief Economist Doug Duncan. “It’s now clear that our concerns have materialized, pushing down our already modest growth projections.”
Pending home sales declined in June from May, The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, slipped 1.4 percent to 99.3 in June from a downwardly revised 100.7 in May – but it’s 9.5 percent higher than June 2011 when it was 90.7. The data reflect contracts but not closings.
Foreclosure activity in the first half of 2012 increased from the previous six months in 125 of the nation’s 212 metropolitan areas with a population of 200,000 or more.
Florida accounted for four of the top 20 metro foreclosure rates. Florida cities in the top 20 include Orlando (No.12), Miami (No. 13), Cape Coral (No. 17) and Lakeland (No. 18). In gauging change between the last half of 2011 and the first half of 2012, the Tampa-St. Petersburg-Clearwater area had the highest foreclosure increase at 47 percent.
Florida accounted for four of the top 20 metro foreclosure rates. Florida cities in the top 20 include Orlando (No.12), Miami (No. 13), Cape Coral (No. 17) and Lakeland (No. 18). In gauging change between the last half of 2011 and the first half of 2012, the Tampa-St. Petersburg-Clearwater area had the highest foreclosure increase at 47 percent.
Buyer interest remains strong, but fewer home listings mean fewer contract signing opportunities. National Association of Realtors indicated that we’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”
Residential investment is expected to increase this year but from a very low base, and is expected to contribute to economic growth for the first time since 2005. According to Fannie Mae’s June 2012 National Housing Survey, homeowners are showing greater confidence in one-year-ahead home price expectations, and their broad attitudes regarding the housing market continue to improve.
The share of polled consumers who say they would buy a home if they were going to move increased by 6 percentage points to the highest level seen in the survey’s two-year history. This is likely due in part to low interest rates and the assumption that home prices have hit bottom.
So the one hand, things are not all that good, but then on the other, things are getting better, albeit slowly. I would add that in this situation, if you can; now is a good time to buy a house. Is that perfectly clear?
Dane Hahn is a real estate professional. You can reach him at 941-681-0312, or by email at dane.hahn@gmail.com.