Economist's Commentary: August 29, 2008
Quick Take on the Economy: August 29, 2008
By Ken Fears, Manager, Regional Economics
Personal Income - Bureau of Economic Analysis
- The headline figure for personal income fell 0.7% in July due to a change in accounting for the tax rebates. Excluding the rebates, disposable income rose 0.5% in July, up from 0.3% a month earlier.
- Spending slipped to 0.2% from 0.6% a month earlier, while the savings rate eased to 1.2% from 2.5% over the same period.
- June's figures for savings and spending were bloated by persons saving their tax rebates.
What does this mean for Realtors® and consumers?
- Incomes are modestly rising, which is more important to home purchases than a short-term stimulus like tax rebates; savings is also historically strong. This combination will seat potential buyers with more equity for down payments and more income to meet monthly payments; a steady improvement to buyers' fundamentals.
Daily Forecast Update
- NAR's monthly official forecast as of August 7th (15K PDF)
- GDP Q3: 2.0%
- GDP Q4: 0.5%
- Unemployment rate by election time: 5.9%
- Average 30-year fixed mortgage rate by mid-2009: 6.7%
- Average 30-year fixed mortgage rate in December: 6.8%
- The next Fed policy change: a rate hike in December 2008
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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