Al’s Column

Dec. 9/16 2013; Volume 27/number 16

By FCNews staff

HOUSING UP: Markets in 54 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders (NAHB)/First American Leading Markets Index (LMI). The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide market is running at 86% of normal economic and housing activity. 
The LMI figures for November showed that 55 housing markets were operating at or above their last normal levels, and the nationwide market was operating at 85% of normal growth. “This index shows that most housing markets across the nation are continuing a slow, gradual climb back to normal levels,” said NAHB chairman Rick Judson. “Policymakers must guard against actions that could impede or even reverse the modest gains of the past year.”

CONSTRUCTION HIGH: The Department of Commerce said construction spending during October was estimated at a seasonally adjusted annual rate of $908.4 billion, 0.8% above the September estimate of $901.2 billion. That was the highest level in four years, due to increases in public projects. The October figure is 5.3% above the October 2012 estimate of $863.1 billion. Spending on private construction was at a seasonally adjusted annual rate of $625.7 billion, 0.5% below the September estimate of $629.0 billion. Residential construction was at a seasonally adjusted annual rate of $326.9 billion in October, 0.6% below the September estimate of $328.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $298.9 billion in October, 0.5% below the September estimate of $300.2 billion.

HOMES SURGE: New home sales jumped 25.4% to a seasonally adjusted annual rate of 444,000 units in October, according to the Commerce Department. That came after a decline of 6.6% in September. Compared with October last year, new home sales were up 21.6%. The seasonally adjusted estimate of new houses for sale at the end of October was 183,000. This represents a supply of 4.9 months at the current rate of sale. One factor in this increase in unit sales was a decline in prices, a trend that is typical in the colder months. The median price of new homes fell 5.3% to $245,800 in October, the lowest level since November 2012. The late release of both reports was due to the Federal government shutdown.

ONLINE TAXES: The U.S. Supreme Court said it won’t hear Amazon’s challenge to a state law that requires online retailers to collect sales taxes on purchases even if the retailers have no physical presence in the state, according to the Wall Street Journal. Amazon and overstock.com had challenged a 2008 New York state law that makes it easier for the state to require online retailers to collect state sales taxes. The N.Y. Supreme Court upheld the state tax in March. The Marketplace Fairness Act, which has been strongly supported by the World Floor Covering Association (WFCA) and other groups, is now pending before Congress (see story on page 3). It would grant states the authority to force online and catalog retailers to collect sales tax at the time of a transaction, no matter where they’re located.

MANUFACTURING EXPANDS: The U.S. manufacturing sector expanded at its fastest rate in more than two years last month, according to the Institute for Supply Management (ISM). ISM said its index of national factory activity rose to 57.3 in November from 56.4 in October, its best showing since April 2011. November was the sixth consecutive month of acceleration in the manufacturing sector. The new orders index rose to its highest level since April 2011, rising to 63.6 from 60.6. The employment index rose to 56.5 from 53.2 to reach the highest level since April 2012.

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