Daily Forecast Update: State Sales, Quarterly Metro Prices, etc

November 10, 2009

By Danielle Hale, Research Economist 

Daily Forecast Update

• NAR's monthly official forecast as of October 1st
• GDP 2009 Q4:  +2.5% ↑
• GDP 2010 Q1:  +3.3% ↑
• GDP 2010 Q2:  +3.0%
• Unemployment rate by the end of 2009:10.4%
• Average 30-year fixed mortgage rate by mid-2010 2009: 5.6%  

What does today's data mean for REALTORS® and consumers?

• Today's data on home sales is positive in most states. Increasing home sales boost the GDP forecast for the next two quarters because research indicates that most buyers spend a substantial amount on moving, remodeling, renovating, and furniture and other purchases in the months following a home purchase. For state by state estimates of the economic impact of housing purchases, click here.
• Improvement in the Kansas City Federal Reserve Bank's Financial Stress Index is welcome. While the improvement is not as dramatic as it has been in recent months, the index is nearing zero, a value which indicates that stress, as measured by the index, is commensurate with the long term average value.

Today's Data on State Sales and Quarterly Metro Prices

• In addition to the national series released monthly, NAR produces data on the state and metro-area level.
• While performance varies substantially on the local level, more locations are experiencing increasing sales than decreasing sales. Prices are increasing in some areas.
• See the news release here and the data here.

Kansas City FRB Financial Stress Index

• The Kansas City Federal Reserve Bank has constructed an index for measuring financial stress in the overall economy. The Financial Stress Index is composed of 11 variables that measure asset prices and yield spreads.
• A positive value indicates that financial stress is above the long-run average, while a negative value signifies that financial stress is below the long-run average.
• The October 2009 Index value is 0.46, slightly lower than September's 0.51. The positive value indicates that financial stress is still above the long run average. However, the value is much lower than in recent months. The value was above 5 a year ago and as recently as May was at 2.31. By comparison, the index was at 1.15 in the October 1998 crisis and began the current crisis at a level of -0.36 in July 2007.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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