NAR said home sales rose 7.6 percent to an annual rate of 4.13 million in August from an upwardly revised 3.84 million last month. Home sales had been forecast to grow to 4.10 billion euros from 3.83 million originally reported for the previous month.

While home sales partly offset the decline of 27 percent was observed in the previous month, sales are still by 19 percent compared to the same month a year ago.

Noting that home sales remain good, Mary Taylor, NBR chief economist, said: “The housing market is recovering on its own, without the tax credit for home buyers.”

“Affordability is very attractive, so the housing market recovery will likely be picking up steam,” she added.

A 13.8 percent increase in sales of existing homes in the West contributed to the growth of global sales, while home sales in the Northeast also rose 7.9 percent. Home sales in the South and Midwest increased 5.2 percent and 5.0 percent respectively.

With the increase in annual sales, total housing inventory at the end of August fell to 11.6 months supply at current sales pace from 12.5 months supply last month.

The report also showed that the average price was up 0.8 percent from a year ago.

Friday morning, the Commerce Department plans to publish a separate report on new home sales in August. Economists expect new home sales to increase by 5.4 percent to a 291,000 annual rate in August after increasing by 12.4 percent to an annual rate of 276,000 last month.

Housing starts rose in August to an annualized rate of 598,000, compared with a revised 0.4% increase in July, the Housing Department reported Tuesday. Economists surveyed had expected housing starts to drop to 535,000 on a seasonally adjusted basis.

The report  points to an upturn in the weak U.S. housing market, and the data was better-than-expected number. They pointed out that data for multi-family starts, which surged 32.2%.

New construction of single-family homes, which account for 75% of the housing market, rose a much smaller 4.3% to an annualized rate of 438,000. Although it was the first increase in four months, construction of single-family homes is still 9.1% lower compared to year ago.

Starts rose in all regions except the Northeast, where they slumped 24.3%. Big increases in the West (34.3%) and the Midwest (21.7%) offset that decline.
SoNo development on the western fringe of Chicago’s Lincoln Park area was intended at its groundbreaking to comprise two matching towers. Only one was constructed, with units being sold at promotional pricing levels.

Data on housing starts has always been hard to measure and the government report is prone to sharp revisions. Complicating the picture was a federal tax credit for new home buyers that expired earlier this year. The credit caused home sales to spike in the spring, peaking at 679,000 in April, and then plunge over the summer, falling to as low as 539,00 in June.

“We have found a bottom for housing activity and it should grow from here,” said senior U.S. economist Mark Liddel of Global Bank, PLC.

Permits for new construction, a more accurate gauge of home building, increased 1.8% to an annualized rate of 569,000.

Permits for condominiums and apartments rose 9.8%, but permits for single-family homes dipped 1.2% to an annual rate of 401,000. Single-family permits are viewed as one of the best indicators of future economic health and tend to draw the most attention of economists.

The housing market plays a huge role in the U.S. It’s usually one of the first to weaken before a recession and one of the quickest to recover as growth resumes. The housing industry also has wide-ranging influence on the rest of the economy, since so many raw materials and finished goods are required to build homes and furnish them after sale.

The number of visitors during July increased by 4.7 percent from fewer than 3.2 million last year to more than 3.3 million this year, according to a report by the Las Vegas Convention and Visitors Authority.

The LVCVA said July tourism numbers benefited from an extra Saturday in the month, record drive-in traffic and an increase in convention attendance.

Citywide hotel occupancy held steady at about 84 percent as the number of rooms increased by about 7,000 since last year, primarily due to the addition of CityCenter.

The average daily room rate increased 4.8 percent from $86.23 last year to $90.38 this past July, the LVCVA said.

Overall gaming revenue was strong since last year, but with stronger baccarat numbers, the Strip matched last years gaming revenue.

Convention attendance increased by more than 28 percent, primarily because of a new large convention.

Vehicle traffic on Interstate 15 at the Nevada/California state line was up 4.7 percent.

Visitor volume to Laughlin dropped 0.6 percent from July 2009 to July 2010, while the number of visitors fell 5 percent in Mesquite.

NEW YORK – A more upbeat outlook on jobs pushed Americans’ confidence in the economy higher in December for the second month in a row, a survey released Tuesday said.

Consumers’ expectations for the job market over the next six months reached their highest level in two years, but Americans remain gloomy about their current prospects.

Meanwhile, a closely watched home price index released Tuesday showed that home prices rose for the fifth month in a row in October, but the recovery continues to be uneven with only 11 of the 20 metro areas tracked showing gains.
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The Conference Board said its Consumer Confidence Index rose to 52.9, up from a revised 50.6 in November, but the reading is still far short of the 90 that would signify a solid economy. In October, consumer confidence was 48.7.

Economists surveyed by Thomson Reuters predicted a reading of 52 for December.

The index, which hit a historic low of 25.3 in February, had enjoyed a three-month climb from March through May, fueled by signs that the economy might be stabilizing. The road has been bumpier since June as rising unemployment has taken a toll on consumers.

Economists watch consumer sentiment because spending on goods and services for consumers accounts for about 70 percent of U.S. economic activity by federal measures.

One key component of the Confidence index that measures consumers’ outlook over the next six months rose to 75.6 from 70.3 last month, the highest level since December 2007, when the index was 75.8. But the survey’s other main component, which measures shoppers’ current assessment, actually fell to 18.8 from 21.2.

The survey of 5,000 households ran Dec. 1 through 21.

“Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010,” Lynn Franco, director of The Conference Board Consumer Research Center said in a statement.

Still, many retailers are breathing sighs of relief after the holiday selling season turned out better than expected, according to MasterCard Advisors’ SpendingPulse, which track all forms of payment, including cash.

However, even though shoppers saw their confidence improve slightly and bought a bit more, they’ve been cautious in their spending. During the Christmas season, they focused on practical items for loved ones and even for themselves, while shying away from buying gift cards and opting for deeply discounted items instead.

Stubbornly high unemployment
Experts say such patterns might remain for several years amid unemployment that could be stubbornly high.

The unemployment rate dipped in November to 10 percent, down from a 26-year high of 10.2 percent in October. Some analysts worry it will again start to rise in coming months and won’t peak until hitting 10.5 percent next summer.

Still, businesses cut their payrolls by a net of just 11,000 jobs in November, the smallest decrease since the recession started two years ago, according to the November job report.

For December, economists surveyed by Thomson Reuters expect that the unemployment rate will tick up to 10.1 percent, but they also expect no job losses on net when the government reports figures Jan. 8.

According to The Standard & Poor’s/Case-Shiller index, home prices edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters.

The index is now up 3.4 percent from its bottom in May, but still almost 30 percent below its peak in April 2006.

The Conference Board survey showed that consumers’ assessment of current conditions worsened in December. Those saying conditions are “bad” increased to 46.6 percent from 44.5 percent, while those saying business conditions are “good” decreased to 7.0 percent from 8.1 percent.

Consumers’ six-month outlook improved in December. Those anticipating business conditions will be better over the next six months increased to 21.3 percent from 19.7 percent, while those expecting conditions will deteriorate declined to 11.9 percent from 14.6 percent.

The outlook for the job market was also more positive. The percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2 percent from 15.8 percent, while those expecting fewer jobs declined to 20.7 percent from 23.1 percent. However, the proportion of consumers anticipating an increase in their incomes declined to 10.3 percent from 10.9 percent.

The Standard & Poor’s/Case-Shiller home price index released Tuesday edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. Without adjusting for seasonal factors the index was flat from September.

The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters. Many economists, however, are predicting a double dip in prices this winter as foreclosures increase and government support wanes.

The index is now up 3.4 percent from its bottom in May, but still almost 30 percent below its peak in April 2006.

Key role
Home prices play a key role in the economy. Homeowners feel wealthier when property values rise and are more likely to spend money. Rising prices also help millions of homeowners who owe more to the banks than their houses are worth.

The positive trend in home prices and a better employment outlook helped raise the Consumer Confidence Index to 52.9 in December, up from a revised 50.6 the month before, the Conference Board reported Tuesday. While far below a 90 reading that would signify a solid economy, consumers’ outlook on jobs over the next six months reached its highest level in two years.

The federal government has stepped in with far reaching programs to create jobs and make homeownership more affordable.

The strong showing in retail sales last month raised hopes that consumers are starting to feel more comfortable about opening their wallets after months of building savings. The 1.3% increase was more than double the gain that analysts had forecast.

The government’s retail report came as a relief to many investors who have been frustrated that consumer spending, a mainstay of the U.S. economy, has remained in a funk even as other parts of the economy recover.

A separate report showing an increase in consumer confidence signaled that spending could continue to rise. The preliminary Reuters/University of Michigan consumer sentiment index increased more than expected in December.

In another welcome sign, the Commerce Department reported a 0.2% gain in business inventories in October, breaking a 13-month streak of declines. That’s a signal that businesses expect consumers to step up their purchases.

Hopes of an economic rebound have driven stocks sharply higher for nine months, but the advance has slowed in the last month as investors lock in the year’s huge returns and question what catalysts there might be to power the market higher next year.

Stephen Wood, chief market strategist at Russell Investments, said Friday’s reports helped confirm that the economy was on the right track.

“We’re going from the first global recession in 70 years to a tepid but very real global growth story,” he said.

The Dow Jones industrial average rose 65.67, or 0.6%, to 10,471.50. The Standard & Poor’s 500 index gained 4.06, or 0.4%, to 1,106.41. The Nasdaq composite index fell 0.55, or less than 0.1%, to 2,190.31.

The Dow rose 0.8% for the week, its second straight weekly gain. The S&P 500 index rose for a third week, edging up less than 0.1%. The Nasdaq fell 0.2% for the week.

Gold dropped $6.30 to $1,119.40 an ounce. Oil fell for an eighth day, sliding 67 cents to $69.87 a barrel on the New York Mercantile Exchange.

A steep drop in the number of employers who cut jobs last month and other signs of improvement in the economy have brought expectations that the Federal Reserve will raise interest rates sooner rather than later. That would boost the dollar and initially hurt stocks as investors look for better returns elsewhere.

“Higher interest rates down the road probably would not derail this bull market mainly because the economy is on better footing than people think,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.

Treasury prices mostly fell Friday after the encouraging economic reports weakened demand for safe-haven investments. That pushed yields higher. The yield on the benchmark 10-year Treasury note rose to 3.54% from 3.48% late Thursday.

Copyright © 2010, The Los Angeles Times

Consumer spending picked up in October, new-home sales hit their highest point in more than a year and shoppers’ outlook brightened a bit ahead of the crucial holiday shopping season.

Combined, the news suggested that the economy should be able to sustain at least a modest rebound. Some economists have worried that the economy was at risk of slipping back into recession.

The number of people filing first-time claims for jobless aid fell by 35,000 to 466,000, the Labor Department said Wednesday. That was the fewest since September of last year. And it was far better than the 500,000 economists had expected.

Still, analysts noted that jobless claims would have to drop to near 400,000 for several weeks to signal actual growth in employment.

Economists estimate the economy will lose a net 145,000 jobs this month. It would have to add 125,000 jobs a month just to keep the unemployment rate from rising.

Some economists sounded cautionary notes about Wednesday’s positive news. They say the sluggish recovery could limit further improvements in jobless claims, new-home sales and consumer spending, which powers 70 percent of the economy.

“When taken all together, the reports still paint a picture of a slow economic recovery,” said Mark Vitner, an economist at Wells Fargo.
Encouraging signs
Still, taken together, the reports on jobless claims, consumer spending and home sales were encouraging, and stock prices rose in light volume on Wall Street.

New jobless claims dropped below 500,000 for the first time since the first week in January. Weekly claims peaked at 674,000 in March and have since been trending lower.

Consumer spending rose a 0.7 percent last month, following 0.6 percent drop in September, the Commerce Department said. It was the best showing since a big 1.3 percent jump in August when the government’s now-defunct Cash for Clunkers programs enticed people to buy cars.

Incomes, the fuel for future spending, rose 0.2 percent for the second straight month.

Consumers spent more on costly “durable” manufactured goods — such as cars and appliances. Such spending rose 2.1 percent. They also boosted spending last month on “nondurables,” including food and clothes, and on services.

Sales were 23.5 percent higher than in October 2008 and 10.1 percent greater than in September. This was the highest pace of selling activity since February 2007, just as the housing boom was winding down nationally.

The median existing single-family home price was $173,100 in October, down 6.8 percent from a year ago, the NAR said.

The Philadelphia region’s sales numbers, reported Nov. 13, were even better than the nation’s, rising 25.8 percent year over year, according to Prudential Fox & Roach HomExpert Report.

The median price was $202,000, down 6 percent from $214,900 in October 2008, HomExpert reported.

Again, the gain regionally was attributed to the rush by qualified first-time buyers to be eligible for all or part of an $8,000 tax credit that was to have expired Nov. 30.

The rush of buyers was intensified during October by wrangling in Congress over extending and expanding the credit into 2010.

“The government learned the joys of bait-and-switch as the prospect of the first-time buyers’ subsidy ending, which it didn’t, caused almost panic buying,” said economist Joel L. Naroff, president of Naroff Economic Advisors in Holland, Bucks County.

The extension, which begins Monday and ends April 30, continues the $8,000 tax credit for first-time buyers. For other home buyers, it adds a $6,500 credit for those who have lived in their houses for at least five years. It also increases income limits.

With new home sales up 22 percent this year, builders have grown more confident in their ability to estimate what they should pay for land and expect to profit after construction costs.

Land is changing hands in Las Vegas at a faster pace than anytime in the past three years and prices are inching upward, said Aman Lal, who recently opened an office for Hoffman in Las Vegas.

That’s a strong signal the city’s housing market has hit bottom and is starting to recover, he said.

“There is a big misconception out there that the land market in Las Vegas is dead and all the homebuilders have gone away,” Lal said. “In fact, what’s happening now is just the opposite. The supply of finished lots is diminishing rapidly and builders are clamoring to snap up what’s left so they won’t be forced to buy raw land.”

Dennis Smith, president of Las Vegas-based Home Builders Research, said he’s seen a flurry of activity from both builders and investors purchasing residential lots in Las Vegas. He reported more than 17,000 finished lots in the metropolitan area, including about 2,500 available for purchase.
Las Vegas one of areas with falling prices

Homebuilders are on the hunt again, vying for choice parcels even in foreclosure-riddled markets such as Las Vegas, Southern California and Orlando, Fla., where prices are cheap and there are early signs of a recovery.

While experts don’t see a full-blown land rush, they notice a surge in land deals since early summer as home sales and prices began to stabilize. For the better lots, the competition is fueling bids well above the asking price.

It was primarily investors buying lots in Las Vegas for the past two to three years, said Michael Stuart, senior vice president of land for Colliers International in Las Vegas. Since August, major builders such as KB Home, Richmond American and Harmony have “jumped back in the game,” he said.

“Raw land is still pretty much dead,” Stuart said. “Everybody realizes that nobody is producing finished lots. By the end of next year, we’re going to be out of finished lots or close to it.”

He represented Kimball Hill Homes, which filed for bankruptcy last year, in the recent sale of about 1,100 lots in Las Vegas to Irvine, Calif.-based SunCal Cos. for more than $20 million.

Most of the lots were in the master-planned communities of Providence, Mountain’s Edge, Green Valley and Southern Highlands. Kimball Hill has cleared out most of its Las Vegas portfolio and reduced its staff from 1,600 employees to about 10, he said.

Ryland Group Inc. and Meritage Homes Corp. are among those that jumped into the fray.

Meritage recently signed contracts to buy 2,500 lots spread out over new communities in several states, including California. The builder plans to open nine new communities this year or early next.

This summer, Ryland bought land or signed option contracts to do so in several markets, including Indianapolis, Atlanta, Houston, Las Vegas and Baltimore.

“We are pursuing more deals than at any time in the past several years,” said CEO Larry Nicholson.

Not all builders are looking to expand their land stockpile.

Pulte Homes, for example, has been more conservative. The builder added thousands of acres to its land holdings when it acquired rival Centex Corp. in August. And roughly half of those parcels are already primed for construction.

“We’re not one of those who need land,” said Richard Dugas, Pulte’s CEO.

Before it was acquired by Pulte, Centex let the option expire on an agreement to purchase about 2,200 acres owned by LandWell Co. in Henderson. The land, former site of a World War II chemical manufacturing plant, was in escrow for two years while the soil was being tested and analyzed.

“In the past (builders) had really been the ones that had been feeding the market and selling lots to investors,” said Tom Dallape, principal at Hoffman Co., a land brokerage firm also based in Irvine. “Now all of a sudden they are rushing back in.”

The timing of these land deals could also be risky.

“The stability we’ve seen has been nice, but it hasn’t been for long, only five or six months,” said Megan McGrath, an analyst with Barclays Capital. “There is certainly some risk that if the market tails off again or we start to see cancellations pick up, some of those deals that previously penciled may not pencil anymore.”

Builders are primarily looking for land in areas that are already cleared for home construction. That way, they will be ready to build and sell in just a few months.