MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.
NICK EICHER, HOST: The housing market continues its recovery: Sales of existing homes climbed in October 2 percent over the previous month, and now 4.6 percent year-on-year. This is good news for a sector that for the first time in the past nearly two years added to Gross Domestic Product in the 3rd quarter, instead of acting as a drag on economic growth.
There remain a few kinks in the housing sector, though: What’s driving growth is higher-end homeowners selling to other higher-end homeowners, and first-time buyers are largely priced out of the market because of a tight supply of starter homes. Growth in the overall market is concentrated in the price range north of $250,000. Below that range, sales declined.
Right now, the supply of homes for sale is at the lowest point since March. A healthy real-estate market would have a six-month supply to meet buyer demand. But a National Association of Realtors estimate says the available supply is less than four months. The economic principle is, tight supply puts upward pressure on prices, and even low interest rates aren’t enough of a counterbalance.
Here’s the good news: Home construction jumped almost 4 percent in October versus September, and builders also secured more permits for single-family home and apartment construction—5 percent more. That’s a positive sign for future housing supply.
REICHARD: Trade warriors President Donald Trump and President Xi Jinping say they are getting closer to trade peace. Both sides issued statements last week: Xi said China doesn’t want the trade war, but will fight back as necessary.
President Trump suggested President Xi needs a deal more than he does: “I’m not anxious to make it,” Trump said, nevertheless an end to trade hostilities is, his words, “potentially very close.”
The Wall Street Journal reported last Thursday that China’s lead negotiator in the talks has invited his American counterparts to Beijing for more talks, and that seems to mean there may be some progress. The sticking points remain China’s insistence that the United States roll back tariffs already in place, and America’s insistence that China stop stealing trade secrets from companies chartered in the United States.
EICHER: Well, the six-week winning streak came to an end last week on Wall Street. The week started well, with all the major stock indexes reaching new highs: The Standard & Poor’s 500 and the Dow Jones Industrials each set records on Monday. The Nasdaq set record highs Monday and Tuesday.
But it was downhill from there: Although the stock indexes finished the week well, it wasn’t good enough to erase midweek losses. The S&P 500 finished off three-tenths for the week. The Dow down half a percentage point. And the Nasdaq off two-tenths.
And that is today’s Monday Moneybeat.