Friday, September 24, 2010

Weekly Review

The Lehmann Letter (SM)

The release of three major indicators made this a big week for real estate: Housing starts, existing-home sales and new-home sales.

Today the Census Bureau announced 288,000 new homes sold in August:

That number shows no sign of recovery.

But it was yesterday's release by the National Association of Realtors of August's existing-home data that was a real eye catcher: 4.1 million following 3.8 million in July.

Existing Home Sales

(Click on chart to enlarge.)

Recessions shaded

If you plug those numbers into the chart it looks like a double dip. That's because the tax credit artificially inflated Spring sales, which then plunged with the tax credit's expiration.

But keep your eye on the chart. We are now hovering around 4 million sales per month, a figure lower than any during the depths of the recession. There is no sign of recovery here.

Finally, the Census Bureau also announced today that new orders for nondefense capital goods were flat in August:

That's an important barometer for the direction of business capital expenditures. It's stuck in a rut, too.

It was not a good week.

(The chart was taken from [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2010 Michael B. Lehmann

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