* UNEXPECTED DROP IN HOME RESALE SALES IN JUNE

July 22 – Existing home sales fell 1.2% in June in the United States, pausing after two months of strong gains, but prices continued to rise to a five-year high that suggests the housing market recovery remains on track.

Sales of existing homes fell 1.2% to an annualized rate of 5.08 million units, according to data from the National Association of Realtors (NAR), while economists polled by Reuters had forecast an average increase of 0.6% to 5.25 million units.

The May increase was revised to +3.4% instead of the initially announced 4.2%, i.e. 5.14 million units and not 5.18 million.

Over the 12 months to the end of June, sales showed a 15.2% increase and the median price climbed 13.5% in the interval to $214,200, the highest since June 2008, the NAR points out.

The rise in mortgage rates, in anticipation of the start of a withdrawal of the Federal Reserve's ultra-generous monetary policy, probably helped to temper the market in June, the professional group adds.

 

* CONSTRUCTION STARTS AT A TEN-MONTH LOW

July 17 – Housing starts fell to a ten-month low in June, fueling fears of a sharp slowdown in economic activity in the second quarter.

According to the Commerce Department, housing starts fell 9.9% at an annual rate of 836,000 units, while the consensus forecast was 959,000. The May figure was revised upward to 928,000 instead of the initially announced level of 914,000.

As a leading indicator of the construction market, building permits also decreased by 7.5% in June at an annual rate of 911,000 units compared to a consensus forecast of 1,000,000.

 

* The NAHB index is at its highest level since early 2006

July 16 – Real estate developers' sentiment continued to improve in July, a testament to the continued strength of the housing market recovery, according to the NAHB federation's monthly survey released Wednesday.

The NAHB/Wells Fargo housing market index rose to 57 in July, compared with a revised reading of 51 in April (from 52), while economists polled by Reuters had expected it to average only 52.

This is the highest level observed since January 2006 and the index remains above the 50 threshold, reflecting a majority of favorable opinions on the market's development, after having crossed it last month.

"Today's figures are particularly encouraging, in that they demonstrate an improvement in developer confidence across all regions," emphasizes Rick Judson, president of the NAHB.

* CONSTRUCTION SPENDING NEAR A 4-YEAR PEAK

July 1 – Construction spending in May reached its highest level in nearly four years, as a strong rebound in the public sector largely offset a decline in private non-residential construction.

According to figures released Monday by the Commerce Department, spending rose 0.5% at an annualized rate of $874.9 billion, following a revised 0.1% increase in April. This is the fastest pace since the $880.3 billion recorded in September 2009.

Economists polled by Reuters had anticipated a rise of 0.6% after an initial estimate of 0.4% in April.

Public works projects saw their spending increase by 1.8%, an unprecedented rise in almost a year, after two consecutive months of decline.

Private residential construction spending rose 1.2% to its highest level since October 2008, after a decline of 0.1% in April.

Private non-residential construction spending fell 1.4%, after three consecutive months of increases.

 

Source: Les Echos