WREN Report: New Home Sales Disappointing, Confidence Improves

September 28, 2008  by in UnCategorized   

By Home Furnishings Business in on September 2008 • Compared with August results, sales of new homes dropped a disappointing 11.5 percent in July to a seasonally adjusted 460,000, based on a joint report issued by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Compared with August of last year, new home sales plummeted 34.5 percent.

The Midwest region posted a gain, up 7.2 percent compared with July figures, with Northeast regional sales off a staggering 31.9 percent, the South declining 2.1 percent and the West falling 36.1 percent.

Measured against year-earlier sales, all four regions recorded huge drops. Sales in the Northeast fell 45.8 percent, the Midwest dropped 39.3 percent, the South slipped 24.4 percent, and the West skidded 50 percent.

• The Reuters/University of Michigan Surveys of Consumers, an important measure of consumer confidence, increased again in September, up to 70.3 from 63 in August, but substantially below the 83.4 recorded last September and the peak of 96.9 in January 2007.

The Index of Consumer Expectations, a closely watched component of the Index of Leading Economic Indicators that is noted for its ability to foreshadow recessions, was 67.2 in September, up from 57.9 in August, but it remained below the 74.1 recorded last September and the peak of 87.6, also in January 2007.

Nine-in-ten consumers in September thought that the economy was in recession. In the survey conducted the last full week of the September (from Sept. 18 to Sept. 25, accounting for about one-fifth of the sample), 79 percent of all consumers expected bad times in the economy during the year ahead, up from 57 percent earlier in the month. Moreover, during the past week 64 percent expected a rising unemployment rate in the year ahead, up from 45 percent earlier in September.

Weekly Review of Economic News (WREN) reports are summaries of recently-released economic statistical data that affect the home furnishings industry. WREN reports are compiled by HFB Research Editor Janice Chamberlain.