Home sales hit records
The dichotomy between single-family housing and all other sectors widened in the latest data. Today the Census Bureau reported that the homeownership rate held virtually steady at a near-record 68% of all households in the 3rd quarter. The rental vacancy rate tied the record 9.1% set in the 1st quarter, up from 8.5% in the 2nd quarter and 8.4% in the 3rd quarter of 2001. Both figures are closely tied to the record levels of home sales reported Friday. Census said then that sales of new single-family homes totaled 1,021,000 at a seasonally adjusted annual rate in September, 0.4% higher than the upwardly revised level for August and 19% above the September 2001 figure. The National Assn. of Realtors said existing-home sales rose 1.9% for the month to a 5.40 million pace. That is 7.9% above the September 2001 rate. The number of new homes for sale remained a tight 4 times the number sold in the month. But the inventory of existing homes for sale rose faster, up 4.9% for the month, leaving a 5.2 month supply. The median selling price rose over the year by 6% for new homes, 8% for existing.
Mortgage rates that fell steadily from April until hitting a record low in September enabled many renters to buy homes but also increased vacancy rates for rental housing. Since then, mortgage (and other interest) rates have moved up: the weekly Freddie Mac survey of rates for new 30-year fixed mortgages rose to 6.31% last week from its all-time low in September of 5.98%.
Also on Friday, Census reported that seasonally adjusted durable goods orders (excluding semiconductors) slumped 5.9% in September from a downwardly revised August total, which itself was down 0.6% from July's figure.
These reports are consistent with the Fed's latest Beige Book survey of business reports on conditions in the 12 Federal Reserve bank districts, released Wednesday, which found "Most Districts reported that economic activity remained sluggish in September and early October. Retail sales were weak across the nation, including some declines in motor vehicle sales from very high levels. Most Districts noted that manufacturing activity had declined or grown more slowly. Home building and residential markets were generally upbeat¿ommercial real estate and construction activity softened in several Districts. Atlanta, Chicago, Cleveland, Kansas City, Minneapolis and San Francisco [districts, each of which covers a large region] reported weak conditions in commercial real estate markets. Commercial realtors reported generally flat leasing activity in the Richmond District. While office vacancy rates rose in Dallas, public projects remained a source of strength. In New York, commercial real estate markets were mixed. The demand for commercial real estate was very high in St. Louis; however, construction was slow."
The Bureau of Labor Statistics reported Thursday that the number of mass layoffs (50 or more workers at one site) dropped in September compared to both August 2002 and September 2001. Mass layoffs in construction were mixed, with 80 events involving 5700 workers in September 2002, 98 events and 8200 employees in August, and 68 events covering 4800 workers in September 2001.
BLS reported on Tuesday that seasonally adjusted state "nonfarm employment decreased in 26 states and the District of Columbia, increased in 23 states, and remained unchanged in 1 state in September." Similarly, construction employment was almost equally divided between states showing increases and those with decreases in September, both from August and from September 2001. The worst deterioration occurred in Georgia, down 3% for the month and 13% for the year. Alaska, Kansas, Montana and Oklahoma posted construction employment gains over the year of more than 5%.
The Energy Information Administration reported this afternoon that retail gasoline and diesel prices each fell 1 cent this week but are up 20 and 14 cents respectively from year-ago levels. U.S. Steel and Bethlehem Steel reported higher steel sales and prices in the 3rd quarter but said they expected no further improvement in the 4th quarter, the Wall Street Journal reported Tuesday. In another recent article, the paper reported that softwood lumber prices have unexpectedly fallen this year. And crude-oil prices have recently dropped $3 per barrel.