Economic Focus for the week of May 23, 2011 Volume 15, Issue 20

MORE TOUGH TIMES Key Economic Reports Released This Week

FOR HOUSING RELEASE
DATE
ECONOMIC
INDICATORS
RELEASED
BY
CONSENSUS
SURVEY1
Wt. INFLUENCE ON
INTEREST RATES

April’s 0.8% slip in Existing Home Sales is a sign that “The

Tue 05/24 New Home Sales Bureau of the Census
300k
 If above consensus
**
10:00 am et for April ‘11 Dept. of Commerce  If below consensus
recovery is very sluggish,” NAR senior economist, Lawrence
Tue 05/24 2-Year Note Auction Dept. of the Treasury $35.0B  If strong demand
Yun, says and he attributes unnecessarily tight credit is 1:00 pm et offering
**
 If weak demand
restraining the housing market. Wed 05/25 MBA Mtg Apps Survey Mortgage Bankers Undetermined
7:00 am et for week ending 05/20 Association of America N/A *
Zillow reports that home prices in Hilton Head plunged Wed 05/25 Durable Goods Orders Bureau of the Census
-3.0%
 If above consensus
***
19.3% year-over-year. Home values fell 3.0% in Q1 from 8:30 am et for April ‘11 Dept. of Commerce  If below consensus
the prior quarter and nearly 75% of all homes lost value in Wed 05/25 Gross Domestic Product (GDP) Bur. of Econ. Analysis
2.0%
 If above consensus
****
Q1 ’11. The hardest hit metros were Ocala, FL; Pueblo, CO; 10:00 am et Q1 ’11 2nd estimate Dept. of Commerce  If below consensus
Detroit, MI, and Atlanta, GA. Only the Honolulu market Wed 05/25 5-Year Note Auction Dept. of the Treasury $35.0B  If strong demand
**
showed improvement.
1:00 pm et offering  If weak demand
Thu 05/26 Jobless Claims Bur. of Labor Statistics
400k
 If above consensus
8:30 am et for week ending 05/21 Department of Labor *  If below consensus
Following a brief period of stabilization in 2010, prices have Thu 05/26 7-Year Note Auction Dept. of the Treasury $29.0B  If strong demand
fallen for more than 57 consecutive weeks. This year home 1:00 pm et offering
**
 If weak demand
values are falling about 1.0% a month, according to Stan Fri 05/27 Personal Income & Outlays Bur. of Econ. Analysis  If above consensus
Income 0.4%
Humphries, economist with Zillow. “We now believe a ***
8:30 am et for April ‘11 Dept. of Commerce Outlays 0.5%  If below consensus
bottom will come in 2012, at the earliest.” He further Fri 05/27 Consumer Sentiment University of Michigan  If above consensus
72.0% *
predicts the due to high unemployment and the large 10:00 am et for May ‘11  If below consensus
inventory of foreclosures, home prices could drop by Fri 05/27 Pending Home Sales Index National Association
-1.0%
 If above consensus
**
another 9%. 10:00 am et for March ‘11 of Realtors  If below consensus
1
Survey courtesy of Insight Economics, LLC * Low Importance ** Moderate Importance *** Important **** Very Important
Zillow reports that home values fell 8.2% from March 1010,
and are now 30% off their June 2006 peak.
Before housing can recover two things will need to
The $8,000 first-time-homebuyers tax credit expired in April happen: 1) the economy will need more Jobs, a lot more
2010 and March of 2010 was the last month home values jobs and; 2) foreclosures will need to decrease and the Jessica Lombardo
increased. Patrick Newport, economist with Global Insight, shadow inventory needs to work through the market, Loan Officer
says the slight rebound “may have been entirely due to the currently there is an 8.0-month supply, according to the Hi-Tech Mortgage
tax credit.” This program attracted buyers out future NAR. RealtyTrac reports that 1 in every 593 homes is in 2184 McCulloch Boulevard, # A
month’s inventory of buyers. The tax credit may have Lake Havasu City, AZ 86403
foreclosure.
jessica@hi-techmortgage.com
temporarily bumped home sales but it severely dampening
Office: 866.768.5626
the future demand for which the market is now paying. Newport says,” We have so many bad loans in the Cell: 916.548.8533
Newport expects home prices to fall by 7.0% this year and pipeline that are still going to go through the process.” Fax: 916.372.2518
Paul Dales, economist with Capital Economics sees home
prices falling another 5.0%.