Briefcase
Nation’s home prices rise for second month
WASHINGTON – Home prices rose for the second straight month in most major U.S. cities and are stabilizing after years of declines. But analysts say the trend in prices hardly signals a rebound for the troubled housing market.
A flurry of spring buyers is helping boost sales. At the same time, millions of foreclosures are in limbo, awaiting the results of a government investigation into improper practices by mortgage lenders. Once that probe is complete, banks will resume seizing homes and prices will likely fall again.
The Standard & Poor’s/Case-Shiller home-price index released Tuesday showed that prices rose in May in 16 of the 20 cities tracked.
Boston, Minneapolis and Washington posted the biggest monthly increases. Prices in Detroit, Las Vegas and Tampa, Fla. – three cities hit hardest by the housing crisis – fell to their lowest points since the recession began.
Price declines have been getting smaller through the year. Seasonally adjusted prices have fallen a modest 1.2 percent over the past six months, according to the index. That’s roughly a third of the decline from the previous six months.
Associated Press
New home sales fall 1 percent in June
WASHINGTON –
Sales of new homes fell 1 percent in June to an annual rate of 312,000, the Commerce Department said Tuesday. That’s less than half the 700,000 that economists say is typical in healthy markets.
Last year was the worst for new-home sales on records dating back a half century. Through the first six months of this year, sales are lagging behind last year’s totals.
While new homes represent less than one-fifth of the total housing market, they have an outsize impact on the economy. Each new home creates an average of three jobs and $90,000 in taxes, according to the National Association of Home Builders.
Sales of new homes fell 15.8 percent in the Northeast and 12.7 percent in the West. Sales rose 9.5 percent in the Midwest and 3.4 percent in the South. The median price of a new home rose to $235,200 nationally.
The number of new homes for sale at the end of the month dropped to a record low of 164,000, down 1.8 percent from June. At the June sales pace, it would take 6.3 months to exhaust the current supply of new homes for sale. Economists consider a 6.3 month supply of homes a normal level.
Associated Press
Amazon’s 2Q profit falls but beats projections
SAN FRANCISCO – Amazon.com Inc. said Tuesday that its second-quarter profit fell despite a 51 percent jump in revenue as the leading online retailer spent heavily to expand its business.
The results easily beat analyst expectations, as did Amazon’s third-quarter sales outlook. Its shares rose 6 percent in after-hours trading.
CEO Jeff Bezos attributed the sales growth to “low prices, expanding selection and innovation.”
The growth means Amazon must keep investing in operations expansions and upgrades. So far this year, it has announced it is building 15 new order-filling centers. In a conference call with reporters, Tom Szkutak, Amazon’s chief financial officer, said he expects that figure to rise.
Overall, operating expenses rose 54 percent to $9.71 billion.
For the second quarter in a row, this cut into its bottom line. The Seattle-based company earned $191 million, or 41 cents per share, compared with $207 million, or 45 cents per share, in the year-ago quarter.
Revenue rose to $9.91 billion from $6.57 billion last year.
Analysts polled by FactSet were expecting a profit of 34 cents per share on $9.37 billion in revenue.
Associated Press