Jobless Claims Up, Home Sales Down

The Labor Department reported on Thursday that jobless claims for the week ending April 18 rose to 640,000, up by 27,000 from the previous week's revised figure of 613,000.

The four-week moving average - which smooths out volatility - was 646,750, a decrease of 4,250 from the previous week's unrevised average of 651,000. The advance seasonally-adjusted insured unemployment rate was 4.6% for the week ending April 11, a .1% increase from the previous week.

The advance number for seasonally adjusted insured unemployment during the week ending April 11 was 6,137,000, an increase of 93,000 from the prior week's revised figure of 6,044,000. The four-week moving average was 5,944,000, an increase of 142,500 from the preceding week's revised average of 5,801,500.

The highest insured unemployment rates in the week ending April 4, ranging from 5.8% to 7.7% were in Oregon, Michigan, Idaho, Wisconsin, Puerto Rico, Pennsylvania, Nevada, Rhode Island, Vermont, and Montana.

In other economic news, existing home sales data was also released on Thursday in a separate report by the National Association of Realtors. Sales of existing homes eased in March, but low interest rates and tax credits have drawn out first-time buyers.

Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

And while existing home prices have increased by 4.2% from February to March, the national median price for all housing types was $175,200 - down 12.4% from March 2008. Distressed properties, which account for just over half of existing home sales in March, are selling for about 20% below traditional homes.

An NAR practitioner survey in March showed first-time buyers accounted for 53% of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said.

Total housing inventory for March is 3.74 million homes, representing a 9.8 month supply of homes at the current pace of sales.

Regionally, existing home sales in the Northeast fell 8% to an annual pace of 690,000 in March, and are 22% below a year ago. The median price in this region, $231,700, was down 18.4% from March 2008.

Existing home sales in the Midwest were unchanged in March at a pace of 1.04 million, but are still 11.1% lower than a year ago. The median price of $141,300 is 6.1% below the price from March 2008.

Sales for existing homes in the South dropped by 1.7% to an annual pace of 1.71 million for last month, and are 10.9% below a year ago. The median existing home price for March was $146,900 - down 12.2% from a year ago.

In the West, existing home sales slipped by 4.2% to an annual rate of 1.13 million in March, but are 18.9% higher than they were a year ago. The median price of $252,400 for March is down by 11.1% from a year ago.




Sources:
Bloomberg
National Association of Realtors
Department of Labor Bureau of Labor Statistics