If we're not in a recession, we're certainly close, according to a report from UCLA's Anderson Forecast. The Gross Domestic Product grew by just 0.6% in the first quarter of 2006. That's the smallest increase in four years and down sharply from the 2.5% posted in the last quarter of 2006. The report predicts that housing woes will keep the economy in a funk and consumer spending cautious until sometime next year.
Indicators at the end of June were gloomy. Consumer confidence for June, as measured by The Conference Board's Index, dipped 4.2% to 103.9 for the month. Consumers claiming economic conditions were good dipped to 27.4% in June (down from 29.0% in May), while those saying conditions were bad increased from 14.6% in May to 16.4% in June. Some 21.1% of consumers in June said jobs were hard to get (up from 19.7% in May) while 27.0% said jobs were plentiful (down from 29.1% in May).
Meanwhile the inventory of unsold homes continued to grow in. According to the National Association of Realtors, more than 4.4 million existing homes were for sale but unsold at the end of May; that's almost nine months worth, at current sales rates. And builders had a backlog of more than 7 months of unsold new homes at May's sales pace, some 536,000 unsold homes.
May existing home sales were more or less flat with April, at a 5.99 million unit seasonally adjusted annualized pace; that's 10.3% below the rate set in May of 2006. The median existing home price in May was $223,700, 2.1% below the median price for the same month last year.
May new home sales hit a seasonally adjusted annualized pace of 915,000 units, down 1.6% below April's pace and 15.8% below the rate set in May of 2006. The median sales price of a new home was $236,100, up less than half a percentage point from the $235,300 median price for the same month last year.