Reuters: Construction Job Losses May Top 1 Million

A report from Reuters warns that if the housing crisis tips the economy into recession, as many as 1 million jobs in construction may be lost, based on historical performance.

The report notes that 75,000 jobs have been lost to date from the 7.7 milion employed by the sector in September of last year. That's an unemployment rate for construction of 5.9%, compared to 4.6% for the economy overall.

August Consumer Confidence Index Slips From July

The Conference Board’s Consumer Confidence Index slipped to 105.0 in August (1985 = 100), down 6.2% from the revised July levels, but up 4.8% from August, 2006’s mark.
Said Lynn Franco, Director of The Conference Board Consumer Research Center: "A softening in business conditions and labor market conditions has curbed consumers' confidence this month. In addition, the volatility in financial markets and continued sub-prime housing woes may have played a role in dampening consumers' spirits. But, despite less favorable conditions and in spite of all the recent turmoil, consumers still remain confident. And, current Index levels suggest further economic growth in the months ahead."
Consumers were less upbeat in August than in July. Those claiming conditions are "good" decreased to 26.4%, while those saying conditions are "bad" increased to 16.3%. Consumers were also less positive in their appraisal of the labor market. Those saying jobs are "hard to get" increased to 19.7%. Those saying jobs are "plentiful" dipped to 27.5%.

Home Sales Remain Soft in July

Existing home sales for July dipped 9.0% from the same month in 2006 to a seasonally adjusted annualized rate of 5.75 million units, according to the National Association of Realtors. That figure was virtually flat with sales for June.
Single family existing home sales hit a yearly pace of 5 million homes in July, down 9.3% from July of 2006. Through seven months, some 3.5 million existing homes have been sold.
Average price of an existing home in July was $228,900, virtually flat (-0.6%) with the same month last year.
Sales of new single family homes in July were down 10.2% from July, 2006, to a seasonally adjusted annualized pace of 870,000 units, according to the Census Bureau. Median price reported for a single family new home during the month was $239,500, up 0.6% from the same month last year.

Trends at ISH 2007

A good look at some of the faucets and fixtures on display at ISH 2007 in Frankfurt can be found in Volume 11 of the newsletter from Sphere Trending. Among products featured are interactive faucets from Hansa and Grohe. The newsletter also has a report from this spring's K/BIS in Vegas, NeoCon, and the Creativity in Retail Design show in Tokyo.
Sphere Trending works in the kitchen, bath and home improvement industries, among others. Its blog has been added to "Sites to See" at right.

Canadian Existing Home Sales To Jump 8% This Year

The Canadian Real Estate Association has upgraded its forecast for 2007 to 523,100 units, up 8.1% from last year, and expects new records for existing home sales to be set in most provinces. Average price of a home in Canada is expected to jump 10.4% to $305,900 (Cn).

The group predicts a slight decline of 2% in 2008 to a still-healthy 512,705 homes sold. Existing home prices in Canada are forecast to be up another 5.5% next year to $322,700 (Cn).
CREA Chief Economist Gregory Klump noted, “Resale housing activity was a juggernaut in the second quarter of 2007. Record breaking sales activity in the first and second quarters forced The Canadian Real Estate Association to revise its forecast upward. Home buying sentiment remains upbeat in all regions and mortgage financing is still within reach for many potential home buyers,”

Americans' Average 2005 Incomes Drooped For Fifth Consecutive Year

A report in the New York Times notes that the average income for Americans in 2005 was $55,238, the fifth consecutive year it was less than the average $55,714 in 2000. The paper notes that "income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945." Nearly half of Americans have incomes under $30,000; two-thirds make less than $50,000.

July Foreclosures Up 93% Year-toYear

A new report by RealtyTrac shows nearly 180,000 foreclosures around the country in July, up 93% from the same month last year. There was one foreclosure for every 693 households during the month.
"California, Florida, Michigan, Ohio and Georgia accounted for more than half of the nation’s total foreclosure filings,” said James J. Saccacio, chief executive officer of RealtyTrac.
The firm reported that Detroit had a 70% increase in foreclosures from June to July, with one foreclosure filing for every 97 households. That's more than seven times the national average and highest among the 229 metro areas tracked in the RealtyTrac report.

Lowe's Second Quarter Sales Up 5.8%

Sales of home improvement giant Lowe's increased 5.8% in the second quarter of this year over last, to $14.2 billion. The increase was mostly from the addition of 26 new stores; same store sales for the period were off by 2.6%. Sales for the year to date hit $26.3 billion, up 4.1% over the same period of 2006; same store sales for the half slipped 4.4%.
Lowe's now has 1,424 stores in 49 states totalling 162 million square feet of retail selling space, an 11.1% increase over last year. It expects to open 40 stores in the third quarter.

Fed Cuts Prime Rate

The Federal Reserve Board has cut the primary rate to 5 ¾%. According to a statement, “Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably.”
In other bad news, published reports say Countrywide Financial, the nation’s largest mortgage lender, suffered a thirties-style bank run on Thursday, as anxious depositors rushed to withdraw their savings on news that the lender had to borrow $11.5 billion to stay afloat.

Starts Dip to Lowest Level in Ten Years

Home builders last month started the fewest number of homes since January of 1997, with starts down 20.9% from July, 2006, to a seasonally adjusted annualized rate of 1.38 million units, according to the Census Bureau.
Single-family housing starts were down 25.4% for the month year-to-year to a seasonally adjusted annual rate of 1.07 million units, the lowest rate since December, 1996, but multi-family starts were virtually flat with July, 2006 at a 311,000-unit pace.
Through seven months, some 859,100 homes have been started across the country, 25.0% below the number through seven months of last year.
Nor is there much good news on the horizon. Building permits in July dropped 22.6% compared with July, 2006, to a seasonally adjusted annual rate of 1.37 million units, the lowest since September, 1996. Single-family permits dropped 24.0% in July year-to-year to a rate of just over one million units, with multi-family permits down 18.7% to 370,000 units.
“While there is no immediate rebound in sight, NAHB is currently expecting new-home sales to stabilize by the end of this year and housing starts to stabilize by the middle of 2008,” said NAHB Chief Economist David Seiders. “We expect overall economic conditions, including solid job and income growth, to continue to be supportive of housing. Furthermore, we expect interest rates in government-related components of the mortgage market to remain favorable on a historical basis and we’re assuming that other parts of the housing finance system will regain footing before long. Downside risks definitely surround the latter assumption.”

Remember This, Next Time You Watch the McLaughlin Group

A recent study shows two out of every five people flushes the toilet with their feet to avoid germs, according to manufacturer Foot Flush.

The company offers a pedal-operated flushing device in two models, one shaped like a bare plastic foot. The gizmo has won several awards, including the 2007 ADEX Award for Design Excellence

Home Depot Reports Second Quarter Sales Dip

Home Depot reported second quarter sales of $22.2 billion, down 1.8% from the same period of the previous fiscal year. Subtracting sales from new stores, that works out to about a 5.2% drop, store to store.
Earnings for the Atlanta-based home center giant dipped 15.7% in the quarter to $1.6 billion. The chain is still in talks with investors over the proposed sale of HD Supply, its wholesale distribution business.

Trouble in the Mortgage Market for 2008?

Bloomberg is reporting that a leading real estate investment trust is forecasting higher default rates for subprime mortgages during 2008.
"Late payments of at least 90 days, foreclosures and holdings of seized property among so-called Alt-A mortgages in bonds will probably rise to 3.92 percent in May 2008, from 2.69 percent in May 2007 and 0.89 percent a year earlier, Michael Youngblood, the top mortgage-bond analyst at Arlington, Virginia-based Friedman Billings wrote in an Aug. 3 report. "
Late payments and foreclosures will rise to 0.53% of prime mortgages (from 0.22% two years ago) and a record 14.6% of sub-prime mortgages (from 6.72% two years ago).
In other mortgage-related news, Bear Stearns jettisoned its co-president Warren Spector after two of its mortgage investment hedge funds collapsed. Last week, Bank of America characterized the collapse as "isolated incidents."

I Don't Want to See the One That Got Away...

Here is a product to turn that bathroom into a unique experience...

In the "I'd rather not know more about this, either" department, the website promises, "Fish 'n Flush provides a dual-filter system, making it safe for children."

Money Magazine Takes On the Housing Slump

A good round-up of economists' views on what the sub-prime meltdown means for the overall economy, from the optimistic (Consumers don't really care much about changes in housing prices or, for that matter, in the stock market) to the catastrophic (huge losses in the housing market with home prices falling by half in some areas) here.