Policy Points

28.10.2009 Policy Points Comments Off on Housing Price Indicies

Housing Price Indicies

In August, the seasonally-adjusted home prices of single-family units rose in 16 of the 20 metro areas tracked by the S&P/Case-Shiller Housing Price Indicies. Despite those increases, sales price levels in all 20 markets remain significantly lower than they were one year ago.

1The graph (right) shows changes in price indices for selected metros. Data are shown for Charlotte, certain peer metros in the South Atlantic, and, for purposes of regional comparisons, San Diego and Cleveland. The composite measure for all 20 metros also is shown.

While Charlotte never experienced the same housing bubble seen in other metros, housing prices, as measured by the index, have fallen by 8.7 percent over the past year. And Charlotte was one of four metros tracked in the survey that recorded a month-to-month decline in prices.

Although most of the price tracked by the S&P.Case-Shiller Indicies have risen over the past few months, those trends don’t necessarily mean that the housing bubble has fully deflated. Explains Calculated Risk:

The debate continues – is the price increase because of the seasonal mix (distressed sales vs. non-distressed sales), the impact of the first-time home buyer frenzy on prices, less supply because of modifications and the general slowdown in the foreclosure process, or have prices actually bottomed? My guess is we will see further house price declines in many areas.

28.10.2009 Policy Points Comments Off on The Shrinking Estate Tax

The Shrinking Estate Tax

New estimates prepared by the Tax Policy Center show just how few Americans are subject to the federal estate tax. Observes the center:

In 2009, less than one-quarter of one percent of deaths—just 5,500 decedents—will leave taxable estates, the smallest percentage since at least the Great Depression. In part, that tiny fraction reflects the current recession’s devastation of assets—the Fed estimates that the total value of household and nonprofit assets fell by about one-sixth between 2007 and the first quarter of 2009. But changes in estate tax rules over the past decade have played a much larger role than economic swings.

27.10.2009 Policy Points Comments Off on Around the Dial – Oct. 27

Around the Dial – Oct. 27

Economic policy reports, blog postings, and media stories of interest:

27.10.2009 Policy Points Comments Off on A Widespread Recession

A Widespread Recession

Economic conditions remained weak across much of the nation in September, according to the newest State Coincident Indexes Report prepared by the Federal Reserve Bank of Philadelphia.

In September coincident indexes moved in a negative direction in 39 states and in a positive direction in nine states (ID, IN, LA, MT, ND, OH, SD, TN, VT). No changes occurred in either North Carolina or Nebraska.

image 3The map to the right, which is taken from the Reserve Bank’ survey, shows the three-month changes in coincident indicators by state. Positive numbers denote improvements in economic conditions, and negative numbers refer to declines.

Over the last three months,coincident  indexes decreased in 41 states, rose in seven states (IN, MT, ND, OH, SD, TN, VT) and held steady in two states: Nebraska and South Carolina.

During the same period, North Carolina’s coincident index moved in a slightly negative direction, suggesting that economic conditions continued to deteriorate.

27.10.2009 Policy Points Comments Off on Credit Conditions

Credit Conditions

In a new Economic Letter, the Federal Reserve Bank of San Francisco assessed current credit conditions and attempted to gauge the impact that monetary policy has had on credit rates. Concludes the Bank:

The indicators of aggregate credit conditions outlined in this article suggest that the Fed’s accommodative monetary policy stance during the financial crisis has worked to improve credit markets. The historical federal funds rate indicator declined from 3.1% in June 2007 to 1.7% by June 2009. At the same time though, these results also suggest that overall credit conditions since late 2007 have been tighter than might otherwise have been expected based on historical experience and that this tightness is partly offsetting the Fed’s policy actions.