By Fred Arnold
As the Memorial Day Weekend approaches, I would like to take a moment to reflect on how lucky so many of us are and how grateful we need to be for all that we have. This past week we saw horrific images of the devastation in the Midwest. My thoughts go out to all those that have been impacted by this incredible tragedy. Additionally, let us not forget all of the military personnel serving for all of us around the world.
It is important to always remember that it is our military that places their lives on the line everyday in the name of our freedom. My thanks go out to all of the men and women that serve on behalf of all of us. I attended a SCV Fallen Solders Memorial Bridge Dedication yesterday and wanted to share the link of the event, We will never forget…
New Home Sales increased 7.3% last month, which exceeded virtually all of the expert’s predictions, mine included. In addition, The National Association of Home Builders reported that the home affordability index has reached a record (Great News!). The association reported that in the 1st quarter of 2011 74.6% of all homes sold in the quarter were affordable to the median income level for the U.S. The problem here in California is that our home values are much higher than the rest of the country! Overall home purchase volume is still extremely low, however, real estate professionals have been reporting a slight increase in buyer activity. Unfortunately, the somewhat negative news on housing is the National Associations of Realtors (NAR) reported Friday morning that pending home sales dropped 11.6%. This drop was far worse than any experts had predicted. The House Price Index dropped .3% in March, which represents the 5th month in a row of home values dropping. Although home values continue to drop, the pace of the decline continues to slow which further indicates the real estate market may be stabilizing.
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I believe that we will continue to see the good news bad news reports on housing continue for some time to come. The bigger concern is that other parts of the economy are showing weakness. If you have been watching the stock market lately you will see that trading has been volatile. Despite the volatility of the stock market, the Dow Jones Industrial Average is about where it was on April 1st. However, in the month of May alone, the market is down by 3%.
First Time Jobless claims continue to remain a concern in that claims have been averaging over 400,000 for the last month. This past week’s report of 424,000 claims represents an increase of 10,000 from the prior week. The Consumer Sentiment Report indicated that consumers, although they are not confident about the economy today, mostly believe that the future will improve significantly (of course, Americans are always optimistic). It is this optimism that is the key to lead us all into better economic times. We must continue to believe and be patient. (Do we really have a choice?)
Reports due out next week are:
Tuesday May 31st – S&P Case-Shiller House Price Index
o Wednesday June 1st – MBA Applications, ADP Employment, ISM MFG Index & Construction Spending
o Thursday June 2nd – First Time Jobless Claims
o Friday June 3rd – National Unemployment
Have a great holiday weekend.
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