Finally heading in the opposite direction. Data not seasonally adjusted. (Mathew Katz / © 2009)

By Mathew Katz

For the first time in three years, U.S. single-family home prices rose in May, according to today's S&P/Case Shiller Home Price Index. The index tracks changes in the value of the residential real estate market in 20 metropolitan areas across the U.S. In May, the index went up by 0.5 percent. According to a Reuters poll, economists had forecast a 0.5 percent drop in the index.

The seasonally adjusted version of the index shows another drop in housing prices, but it's the smallest drop since 2007.

The stabilization in the index comes right after yesterday's news that sales of new homes are up, even though median prices for new homes fell. Much of the mess we're in started with the bubble in the housing market. Stabilizing home prices will be key to getting us back out again.

New home sales were up by 384,000 in June. Click to enlarge.

(Calculated Risk)

By Laura Conaway

The U.S. Census Bureau reports that sales of new homes grew by 384,000, up 11 percent from last month. The median price fell to $206,200, from $221,600 in May. Calculated Risk notes that these are the strongest sales figures since November 2008, the depths of the economics crisis -- and that this is the second lowest total for June sales since the Census Bureau started tracking them in 1963.

The U.S. still has 8.8 months' worth of inventory, meaning that's how long it'll take the real estate market to buy the homes now on offer. Hey, it's down from the record of 12.4 months in January. Calculated Risk writes:

"Months-of-supply for inventory has peaked, and there is some chance that sales of new homes has bottomed for this cycle -- but we won't know for many months. However any recovery in sales will likely be modest because of the huge overhang of existing homes for sale."

The Census Bureau figures focus on single-family homes. If you're living in an area with a lot of condominiums, you can expect that "overhang" to be much worse.

Bonus: Calculated Risk on the gap between new and existing home sales.

Construction crews return to Phoenix, Ariz. Matthew Gindlesperger

 

Matthew Grindlesperger sends this from Phoenix, Ariz. He writes:

Are those green shoots for real? The attached pictures are of a housing development that is back building houses here in the Phoenix area. The original developer lost the property in foreclosure. The new developer bought the property, I don't know if they changed the floor plans. I was told all the houses being build are under contract not spec homes.

By the way, they just raised the prices. The sign used to say from "from the 180"s".

According to the latest figures from the Commerce Department, it looks like Matthew's green shoots are for real. Housing starts in the U.S. rose last month by 3.6 percent. It's the highest level since November and a marked improvement from what analysts had been expecting. Building permits also increased in June to 8.7 percent, a sign that builders' confidence is returning.

This morning we got word that the unemployment rolls are down. Now comes this letter from Rondal:

Over the past three days, I have had two calls from prospective employers looking for references on former colleagues of mine. I learned yesterday that one got the job, and I heard today that the other has an interview scheduled for this afternoon.

The U.S. Department of Labor Commerce Department says new jobless claims last week fell 34,000 to 601,000. That's the lowest figure since Jan. 24, and way less than the 635,000 economists expected.

Ian Shepherdson sees real good -- and really good -- news in that:

A clear turn is now visible in the claims numbers. The eight-week moving average has now fallen for for straight weeks, and the four-week average has dropped by 36K from its early April peak.

This is too big a move just to be noise. Claims can probably fall a good deal further before they hit the wall; they surged by 200K as companies panicked in the six months after the Lehman bust. With activity now apparently bouncing as fear of another Lehman fades, layoffs will drop sharply. But a sustained fall to the sub-350K pace consistent with strong growth is still a very long way off. That requires household deleveraging and healthy banks, and that's not a story for this year.

We're getting there. Planet Money is spending much of the morning sitting around a table in a heavily guarded room, where we'll be critiquing past podcasts and the blog. The Treasury is expected to release whatever news we don't already know about the banks' stress tests -- thanks, Calculated Risk, for keeping score -- so we'll leave you for now with this comforting headline from the LA Times:

"Big banks' 'stress test' results to be reassuring, Geithner says."

Chris B writes:

I am a computer consultant, my specialty is installing hospital computer systems, in particular Emergency Department Systems, as an independent consultant for one of the big three Hospital Information systems.

I am a nurse with 10 years clinical experience and have been working with this system for 18 years. I have been in IT full time for 10 years.I travel to a hospital each week for 6 months to a year, helping to get the physicians and nurses to understand the potential of the system, to reconcile their expectations of the system with what can actually be achieved. The final product is an Electronic Medical Record (EMR).

Continue reading "The Stimulus Package At Work " >

Cheryl writes:

I live in Las Vegas, the poster child for the housing bubble, foreclosures, and failed projects. Last year when the economy took its downward plunge, I saw communities stop building as developers went bankrupt. My boyfriend's community is one in particular where one day they were laying foundation and putting up walls, and the next day the builders were gone, leaving a 60% completed community surrounded by ghosts of the houses that could have been.

Continue reading "'A Small Glimmer Of Light' " >

This one landed in our inbox as a Green Shoots item, and maybe it qualifies -- in the subcategory of Hope Springs Eternal. Alison Holmes writes:

Having never bought an individual stock in my life, we just bought about 200 shares of Citigroup and 100 of B of A about 2 weeks ago. Figure they can't nationalize them both at once.

For what two weeks' time is ever worth, her bet's looking good.

Green takes over the empty lots in Aimee Ennis' neighborhood. aimeesblog/Planet Money Flickr pool

 

Rheanna writes:

I just wanted to say that there are some good things about the recession. I'm 26 and live in Bend, Oregon. During the real estate boom, home prices were incredibly high here. Average working class people in Bend could not afford to buy a home. My husband and I thought we would never be able to buy a house. Last month, we closed on our first home!

Continue reading "Excited In Oregon" >

Under the subject line of "Only a Fool Would Talk About Good News," Joe Chellman writes:

Okay, that's not true.

But talking about good news in this economy makes me very superstitious.

I'm a freelance web developer in Chicago, and so far I'm continuing to do okay. That is to say, my workload has not lightened, and I even got a bit busier starting late last fall. I don't think there's anything particularly magic going on here; I think it's just that I'm a one-person operation with no overhead.

Continue reading "Doing Well In Chicago" >

Seen in the Bucktown neighborhood, Chicago. simonk/NPR/Planet Money Flickr pool

 

Curtis writes:

Well, I can say I have good news. In California where I reside, I earn a living servicing water pumps -- BIG pumps. As water restrictions increase, so does the emphasis on better control of the water. This stretches from the golf industry to the municipal water industry.

There is a slight diversion of purchasing strategy, repair rather than replace.This feeds a blue collar industry in the local region.

Continue reading "Repair Beats Replace " >

The Commerce Department says that orders for durable goods, manufactured products expected to last more than one year, increased 3.4 percent last month. Economists had expected a 2 percent drop.

The biggest increase, 32.4 percent, came in orders for military aircraft and parts. Demand for heavy machinery, computers and fabricated metal products was also up.

The good news did not come without some gloom however, January's drop in durable-goods orders was worse than originally thought. Orders actually fell 7.3 percent in January.

Ian Shepherdson of High Frequency Economics notes this morning that January housing starts jumped by 22 percent. The 583,000 starts far outpaced economists' expectation of 450,000. Shepherdson's not over the moon about it, but still writes:

The leap in starts was propelled by an 82.3% surge in activity in the multi-family sector, reversing almost all the drop in starts over the previous three months. We see no specific factor that might explain this jump; multi-family starts are always noisy but this is exceptional.

Single-family starts and permits both rose too, by 1.1% and 11.0% respectively, after a run of double-digit declines in recent months. With new home sales still falling and the months supply at a record there is no reason for homebuilding to rise. This is a temporary rebound, not a recovery, though it likely means the post-Lehman crash is over.

Emphasis mine. I like the idea that some part, any part, of the crash might be behind us now.

Watch CBS Videos Online

In a 60 Minutes interview last night, Federal Reserve Chairman Ben Bernanke said he expects the recession to come to an end "probably this year." Bernanke said the banking and financial systems will need to stabilize first, but at the moment he is seeing "green shoots:"

I think all of our efforts, so far -- have produced results. We're buying about $500 billion in -- mortgages -- in package and securities by -- the G.S.E.s, Fannie Mae and Freddie Mac. And -- that seems -- to have brought down mortgage rates significantly. It allows people to refinance. To get out of high rate mortgages. we are seeing progress in -- in the money market mutual funds, and in the business lending area.

Continue reading "Bernanke Sees Green Shoots " >

Dave from Somerville, Mass. writes:

There is a small business around the corner: Dave's Fresh Pasta. They make (you guessed it) fresh pasta to take home and cook, and in the last couple of years sandwiches, and then two years ago they added a liquor license and a small selection of wines and beers.

Now of all times they are more than doubling in size and starting a small grocery. What's up with that? Here's my guess: Our corner of Somerville seems pretty stable so far. Dave's clientele typically also eats out a lot (gourmet food types, plus a mixed lunch crowd) -- they're eating out less often now and being able to pick up nice food to carry home seems like a good deal?

Don't get me wrong -- the idea of being able to walk to the corner for produce or local dairy products warms the cockles of my foodie soul -- but this does look surprising.

Maybe slow local growth is the way to go.

Today's green shoot comes from Jim who recently moved from Jersey City to San Francisco. He writes:

My planet money indicator is three weeks and one. I recently moved across the country for personal reasons and didn't have a new job lined up before taking the leap and moving here to follow my significant other. 3 weeks after I got here I'd received a great job offer, and it was from the first place I'd interviewed. My new job pays more than the old one and after a month I'm still thrilled with it and confident that I made the right choice. I expect to be employed there for a long time to come.

Continue reading "Easy Job Search In San Francisco " >

Derek from SurveyGizmo writes:

So I almost feel like I might jinx it by telling you this... but our company has not been noticeably hit by the recession. February was a record revenue month for us (in a month with only 28 days). We just signed a lease on a new office because we're busting at the seams. We had two new employees start last week and are planning to hire at least one more immediately, probably a few more this year.

We're not a giant company, so 2-3 jobs is obviously not going to do a lot for the economy, but we believe we can more than double our revenue in the 2009, perhaps even triple it. Also, 2008 was the best financial year I've had personally since 2000.

Continue reading "'Busting At The Seams' In Boulder " >

Melissa Hanson writes:

My Planet Money indicator: 0% chance of losing my job at this moment.I'm busier now that before this whole thing started. I work in marketing at a retail real estate company in midtown Manhattan. Basically, they find tenants to rent retail spaces or find spaces for retail tenants.

As you can imagine, with all the retailers going out of business, spaces are rapidly becoming available. My job is to create materials to market these spaces. It's busier than ever now.

Continue reading "Retail Rentals: Busier Than Ever " >

Jason sends us this bit of good news from Detroit:

About a month ago you were asking to here from folks that were doing well in this down economy. My wife and I are two of those people. I am currently working at a solar panel manufacturer, and my wife is an elementary school teacher. I was excited to hear Obama's plan roll out last night, as it distinctly called out progression in solar panel manufacturing and incentives for teachers who perform. We have had a great year this past 2008.

Continue reading "A Great Deal In Detroit" >

I've been thinking about starting a category just for sunny news -- because occasionally, there is some. Today, Simon Johnson of Baseline Scenario suggested the name "Green Shoots." And now, economics professor Joe Cavanaugh of Wright State University in Celina, Ohio, has sent the first entry:

You always bring up the bad news but here is a some good news brought on by the recession -- kind of.

15.86 is the percentage change in enrollment at our campus this past year. The enrollment in higher education runs countercyclical so, as has happened in past recessions, the lower GDP the higher our enrollment.

Continue reading "Professor: Enrollment's Up" >