Economy Watch: Home Price Increases Continue to Slow; Non-Manufacturing Sector Grows
Home prices nationwide, including distressed sales, increased 7.5 percent in June 2014 over the previous year, while economic activity in the non-manufacturing sector grew last month for the 54th consecutive time.
By Dees Stribling, Contributing Editor
Home prices nationwide, including distressed sales, increased 7.5 percent in June 2014 compared to last June, CoreLogic announced on Tuesday, another indication that the upward momentum of prices has slowed down. In May, the year-over-year increase nationwide was 8.8 percent. Still, the change represents 28 months of consecutive annual increases in home prices. On a month-over-month basis, home prices nationwide—including distressed sales— increased 1 percent in June.
Excluding distressed sales, home prices nationally increased 6.9 percent in June 2014 compared to a year earlier and 0.9 percent month-over-month. Also excluding distressed sales, all 50 states and D.C. showed year-over-year home price appreciation in June. CoreLogic counts both short sales and REO transactions as distressed sales.
“Home price appreciation continued moderating in June, with its slight month-over-month increase,” Mark Fleming, chief economist for CoreLogic, noted in a statement. “This reversion to normality that we are finally experiencing is expected to continue across the country and should further alleviate concern over diminishing affordability and the risk of another asset bubble.”
Non-Manufacturing Sector Grows
Economic activity in the non-manufacturing sector grew in July for the 54th consecutive month, according to the latest Non-Manufacturing ISM Report on Business, which was released on Tuesday by the Institute for Supply Management. The report is based on a survey of purchasing and supply executives nationwide.
The ISM Non-Manufacturing Index came in at 58.7 percent in July, 2.7 percentage points higher than the June reading and the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.4 percent, or 4.9 percentage points higher than in June and the highest reading for the index since February 2011. The New Orders Index came in at 64.9 percent, 3.7 percentage points higher than in June, and the Employment Index increased 1.6 percentage points to 56 percent in July.
According to the Non-Manufacturing Index, 16 non-manufacturing industries reported growth in July. Among others, they include construction; real estate, rental and leasing; retail trade; accommodation and food services; and transportation and warehousing. The only industry reporting contraction in July was utilities.
Wall Street retreated on Tuesday from its Monday gains, with the Dow Jones Industrial Average losing 139.81 points, or 0.84 percent. The S&P 500 was off 0.97 percent and the Nasdaq declined 0.71 percent.
