Big deal and no media coverage - Signs of life in the economy?
The Conference Board Leading Economic Index (LEI) for the U.S. went up .7 % in June, this follows a 1.3% gain in May, and a 1% up tick in April. Three months of positive growth has not happened since 2004. This is a big deal and not much news coverage on this news.
The Federal Reserve Chairman Ben Bernake testified before Congress this past week and said “A modest recovery is not far off, though it will take a long time to get unemployment levels back down to pre-recession levels.”
Similarly Ken Goldstein, an economist at the Conference Board stated: “The recession has been losing steam since the spring, although very large job losses continue. Nevertheless, confidence is slowly rebuilding. Financial markets are less volatile. Even the housing market is stabilizing. If these trends continue, expect a slow recovery this autumn.”
Meanwhile in the housing sector, new home starts rose over 14% in June marking the fourth straight month of increases. Starts rose more in the East than in the West however. Sales of existing homes were up in many areas for the month as well – rising by 3.6% nationwide in June, according to the National Association of Realtors. New mortgage applications to buy houses continued to increase last week, according to the mortgage Bankers Association, even though rates rose slightly higer. According to the Mortgage Bankers Association the 30 year fixed rate is averaging 5.3% while a 15 year loan is 4.8%.
These indicators are forward looking and show signs of a market that is improving. It’s important for our housing industry to stabilize which will cause pricing to stabilize. While this may not be the news homebuyers are looking for, it will help the overall economy to pull from a recession that started at the end of 2007. In the meantime, the Phoenix real estate market is on sale for those buyers willing to take action.