Economic Data Update - Where we're headed!
Posted July 30, 2009
New Home Sales were released this week, up a staggering 11%. This blew away estimates and continues to add fuel to the recovery fire. The S&P Case/Shiller Index was released as well, showing for the first time since 2006, home prices actually increased. Great news!
Consumer confidence however did not increase, so this is not great news. Now granted, confidence polls are taken at different times than the updated monthly housing figures – and confidence polls incorporate how consumers are feeling across the board, not just specific to housing. So we have to take all of these data reports with a grain of salt.
Durable goods orders also threw a kink into the positive data – orders were down 2.5% in June versus up 1.3% in May. Durable goods cover items such as washing machines, refrigerators, etc.
That being said, one month, two months, three months of positive economic data does not a recovery make… and not to sound like a broken record but I will – until the foundation data as I call it, (jobs and inventory numbers) begins to rebound, we won’t truly be on the path to recovery. As those numbers have not rebounded, we’re simply not there yet.
As I mentioned last week, the Obama Administration invited (more accurately demanded) that the top 25 servicers come to Washington to discuss how to improve the Making Home Affordable Modification program. Out of the meeting came the announcement or expectation that we will see 500,000 modifications in place by November of this year. FYI, Year to Date we’ve seen approximately 200,000 trial modifications so far – a far cry from what the industry wants and certainly needs to really help consumers. The message to consumers here is keep your head up and continue your communication with your mortgage servicer if you haven’t obtained the information that you feel is correct for your situation. Be persistent – it will hopefully pay off for you.
Interest rates are still very attractive – for purchases, refinances and equity lines. The values here in the triangle remain strong and continue to provide us a good baseline for housing investment now and into the future. Business investment continues to grow as well, giving us a very bright outlook across the board here in central North Carolina.
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.