44
ECONOMIC
ANALYSIS
POINTS TO
RECOVERY
As the economy continues toward
recovery, albeit at a slower pace, the housing
market will continue to display vibrancy
amid an increase in residential construction
spending, according to the latest Economic &
Housing Weekly Note published by Fannie
Mae.
"Data in September showed that the
economic recovery is still ongoing, though
there were more signs that the pace of
recovery is slowing," wrote Ricky Goyette,
Associate with Fannie Mae's Economic
and Strategic Research Team. "Job growth
continued in September, though once again
the pace slowed from the prior month. Total
nonfarm payroll employment remains 7.0%
below the level seen in February."
Goyette pointed out that while personal
income levels were down in August, "this
was entirely attributable to a decrease in
unemployment insurance benefits" and was
counterbalanced by "sharp increases in both
consumer confidence and light vehicle sales in
September." As a result, Goyette theorized a
continuation of consumer spending, although
at a slower pace than seen during the summer.
On the housing front, Goyette noted
Fannie Mae remained bullish on this market.
"In housing, data continued to show
strength in the housing market, with an
increase in pending sales to record levels," he
continued. "e increase in September private
residential construction spending supports our
outlook for a strong rebound in residential
fixed investment in the third quarter."
e data cited by Goyette included the
latest Pending Home Sales Index from the
National Association of Realtors, which
spiked by 8.8% from August to September,
reaching a record high of 132.8; the year-
over-year pending sales soared by 24.2%. On
the construction side, the data was culled from
the U.S. Census Bureau's findings that private
residential construction spending rose 3.7% in
September while new single-family housing
spending increased 5.5%, the largest monthly
increase since July 2009. Compared to one
year earlier, new single-family spending was
up by 2.22%.
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