Week of Sept. 26: A slew of housing-related economic data
By — Neil Irwin,
A slew of housing-related economic data is on tap for the week, among other indicators.
Last week brought a pleasant surprise on housing: Existing home sales rose a better-than-expected 7.7 percent in August. Might new home sales offer similar grounds for optimism on this long-suffering sector of the economy? Economists are forecasting a 1.3 percent drop in August new home sales, somewhat worse than the 0.7 percent drop recorded in July. The actual number will be particularly interesting because new home sales are recorded when contracts are signed, not when the purchase closes. Therefore, this will be the first piece of evidence of how home sales activity held up in August, when the stock market started swinging wildly (potentially hurting home buyers’ confidence) and mortgage rates plummeted (potentially helping).
Home prices, meanwhile, are thought to have stabilized over the summer. The Standard & Poor’s/Case-Shiller home price index for July will be released, and analysts expect it to show an 0.1 percent rise in prices in 20 major markets. That could represent a turning point; the index has fallen 12 of the 13 previous months.
Durable goods orders are expected to have backtracked after a surprisingly strong 4 percent gain in July. Overall durable goods orders are projected to have fallen 0.5 percent in August. Nondefense capital goods orders excluding aircraft, which are a nice proxy for capital spending by businesses, are expected to have fallen a worrying 0.4 percent in August after falling 1.5 percent in July.
Analysts expect August data on personal income and spending to reveal sluggish growth in this key component of overall economic activity. Personal income is forecast to have risen 0.1 percent, compared with an 0.3 percent in July, reflecting a weak job market. And spending is expected to have risen 0.2 percent, after an 0.8 percent July gain, showing flagging consumer spending.
Neil’s Must Reads Economists Barry Eichengreen, Eswar Prasad, and Raghuram Rajan take on one of the great questions of the age: how to rethink central banking in the post-crisis world. Read a summary of their ideas at VoxEU, or a full report they and many collaborators prepared, published by the Brookings Institution. Find links at washingtonpost.com/mustreads.