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September 2010 Economic Update Insights

The National Association of Home Builders/Wells Fargo Housing Market Index remained unchanged, reflecting limited strength from home buyers. Flow of Funds data indicated household wealth fell 2.8% in Q2 2010 due to declines in financial assets like stocks. Home mortgage debt also fell at an annual rate of 2.25% while owners' equity in household real estate increased, likely reflecting increased foreclosure sales which reduced mortgage debt.

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10 views2 pages

September 2010 Economic Update Insights

The National Association of Home Builders/Wells Fargo Housing Market Index remained unchanged, reflecting limited strength from home buyers. Flow of Funds data indicated household wealth fell 2.8% in Q2 2010 due to declines in financial assets like stocks. Home mortgage debt also fell at an annual rate of 2.25% while owners' equity in household real estate increased, likely reflecting increased foreclosure sales which reduced mortgage debt.

Uploaded by

dbeisner
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Daily Economic Update

Daily Economic Update
September  20, 2010

 The National Association of Home Builders/Wells Fargo Housing Market 
Index stayed unchanged since last month, at 13. A reading above 50 would 
suggest that sales expectations as perceived as positive, however the index 
has not been above 50 since April 2006. The traffic of prospective buyers 
5 p p p y
fell one point to 9, reflecting home buyers limited strength. The sales 
expectations for next six months also remained unchanged, at 18. 

 Flow of Funds data released on Friday by the Federal Reserve indicated 
household wealth fell 2.8 percent in the second quarter 2010. Household 
net worth, which is the difference between the value of assets and 
li biliti  
liabilities, was estimated at $53.5 trillion, down $1.5 trillion from the 
  ti t d  t   t illi  d    t illi  f  th  
previous quarter. This was the first decline since March 2009. Declines in 
the value of financial assets, particularly stocks and mutual funds, 
accounted for much of the decline  Stocks alone were down $1 9 trillion to 
accounted for much of the decline. Stocks alone were down $1.9 trillion to 
$14.9 trillion.

Produced by NAR Research
Daily Economic Update
Daily Economic Update
September  20, 2010

 Home mortgage debt also fell at an annual rate of 2.25 percent, compared 
Home mortgage debt also fell at an annual rate of 2 25 percent  compared 
with a 4.25 percent drop in the previous quarter. The fall in mortgage debt 
reflects continued increase in foreclosures and tendency towards renting 
instead of purchasing a home. Consumer credit fell similarly 2.25 percent 
p g y 5p
annually. 

 On the other hand, owners' equity in household real estate increased at 
q y
annual rate of 1.1 percent, to 17.118 billion. This is 0.3 percent increase since 
the previous quarter, and 2.6 increase year‐over‐year. Since household 
equity is the difference between the household real estate assets and 
mortgage debt, the increase in housing wealth likely also reflect increased 
t  d bt  th  i  i  h i   lth lik l   l   fl t i d 
foreclosure sales which reduced mortgage debt. 

Produced by NAR Research

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