Wednesday PM July 25th, 2007
by: Ed Mayberry, July 25, 2007 5:07:00 am
Amid a lack of confidence in the housing market, the National Association of Realtors says sales of previously-owned homes fell for a fourth straight month in June. The decline of 3.8 percent in existing home sales is worse than expected. The group also says median home prices rose slightly from a year ago. That is the first year-over-year increase in 11 months. The supply of unsold homes dropped by 4.2 percent, which analysts say is a hopeful sign that recent price declines may soon come to an end. Sales declines were seen across the country. The biggest regional drop was in the northeast, down 7.3 percent.
Houston-area new home sales and construction fell in the second quarter, according to Houston-based Metrostudy. Home starts fell 18 percent and closings fell 17 percent. Metrostudy blames the subprime mortgage meltdown for lessening demand. Single-family starts totaled 11,271 during the quarter, down from 13,793 during the same period last year.
An industry group says applications for U.S. home mortgages fell last week as the housing market continued to struggle. The Mortgage Bankers Association says its weekly mortgage index, which measures the volume of applications for loans to buy or refinance homes, fell 3.6 percent from the previous week. Applications fell for new home loans and for refinancing existing mortgages. Mortgage lenders have been tightening lending in recent months after a surge in defaults and foreclosures. Lenders catering to home buyers with weak, or subprime, credit, have seen a spike in loan defaults, and many have gone bankrupt or sold off their subprime businesses.
Even with the effects of high gasoline prices and the sour housing market, the Federal Reserve says the economy was growing decently in the early part of the summer. The latest snapshot of conditions around the country shows the economy has picked up from its sluggish pace at the beginning of the year and is now growing at a generally moderate clip. The so-called "beige book'' report notes that "oil and gasoline prices were either rising, high or an issue'' in almost every region and yet consumer prices continued to increase "at a moderate rate.'' Information from this latest fed survey will figure into interest rate discussions at the central bank's next meeting early next month.
Houston-based ConocoPhillips says its second-quarter profit fell 94 percent. The nation's third-largest oil company says it incurred a $4.5 billion charge related to its assets in Venezuela. That's where the company has abandoned its heavy oil projects. Even so, ConocoPhillips reports an April-June profit of $301 million. Excluding the Venezuela-related charge, its earnings would have been $4.8 billion. Revenue in the most recent quarter rose less than four percent to $47.4 billion. ConocoPhillips and Irving-based ExxonMobil refused to sign deals last month with the Venezuelan government to keep pumping oil under tougher terms posed by President Hugo Chavez's government. ConocoPhillips continues negotiations with Venezuelan authorities on final compensatory terms for its multi-billion dollar investment in the country's petroleum-rich Orinoco River basin. ConocoPhillips Chairman Jim Mulva has said such talks could take several more months.
Some mixed signals about the initial success of Apple's iPhone. The iPhone's exclusive carrier--San Antonio-based AT&T--has released numbers that show fewer people than expected signed up for service in the first two days of the multimedia cell phone's release. AT&T activated 146,000 iPhones on June 29th and 30th. Analysts predicted Apple would sell 500,000 or more iPhones in the first weekend. Apple's stock price took a downturn after the numbers were released, falling more than six percent Tuesday. But analysts say the activation numbers don't tell the whole story. The actual number of iPhones sold could be much higher, since many users had activation problems and couldn't sign up for a few days. Apple is expected to release more information on iPhone sales in its third-quarter earnings report Wednesday.