Closings on single-family homes in February were 5.8 percent fewer than in February 2009, according to the Houston Association of Realtors. The average price of a home appreciated for the fifth straight month to $203,271—up 12.3 percent since the same month last year. The number of active listings is up 2.3 percent, which pushes the inventory to a 6.3-month supply, compared to the 5.9 percent inventory a year earlier. Sales of all property types is down 7.4 percent from last year. But the total value of all transactions grew 5.1 percent to $747 million. There are over-the-year gains of 16 percent for high-end homes. Foreclosures represent 25 percent of February's single-family closings, but that's fewer than a year ago.
Housing construction fell in February as winter blizzards held down activity in the Northeast and Midwest. The decline highlighted the challenges facing builders as they struggle to emerge from the worst housing slump in decades. The Commerce Department said that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units, slightly higher than the 570,000 that economists were expecting. January activity was revised up to a pace of 622,000 units, the strongest showing in 14 months. Homebuilders are trying to emerge from a severe housing downturn. A rebound in housing is seen as critical to sustaining the overall economic recovery.
Add American Airlines to the list of carriers that want out of the government's new rule to limit the time passengers can be held on the tarmac. American filed for a temporary exemption with the Department of Transportation. The carrier, based in Fort Worth, says delays caused by the closure of the main runway at New York's JFK Airport could cost them millions in fines. JetBlue and Delta asked for exemptions last week. Those three airlines are the largest operators at JFK. Houston-based Continental Airlines is also opting to cancel flights rather than risk fines. The new rule is set to go into effect next month. It could mean fines of up to $27,500 per passenger if a plane is stuck on the tarmac for more than three hours.
Honda says it is recalling about 410,000 Odyssey minivans and Element small trucks because of problems with the brake pedals. The recall includes 344,000 Odysseys and 68,000 Elements from the 2007 and 2008 model years. Honda says the brake pedals can feel soft to drivers and must be depressed closer to the floor than usual before the vehicles will fully stop. The condition worsens over time but affects only some of the vehicles. The company says the problem happens because a part in the stability control system can let a small amount of air into the braking system. Honda says owners should take their vehicles to a dealer as soon as they get notification from Honda. Letters will go out at the end of April.
The top Republican on the Senate Banking Committee says it's unrealistic to think the committee can debate and vote on a financial overhaul bill in one week. Alabama Senator Richard Shelby says forcing the Banking Committee to rush its work on the bill "undercuts the potential for bipartisan agreement." Committee Chairman Chris Dodd unveiled the bill. Dodd wants debate to begin next Monday with work wrapped up within the week. The bill would give the government new powers to break up firms that threaten the economy, force the industry to pay for its failures and create an independent consumer watchdog within the Federal Reserve. It falls short of the sweeping changes President Barack Obama wanted.
U.S. policymakers aren't alone in their struggle to come up with new rules designed to avoid another financial crisis. Efforts are raging on three continents to do the same. Experts are warning that the U.S., Europe and Asia must adopt uniformly strict regulations. Otherwise banks and high-risk traders will shift operations wherever rules are loosest. Kenneth Rogoff is the former chief economist of the International Monetary Fund and is currently a professor at Harvard University. He says the collapse of the venerable brokerage house Lehman Brothers in 2008 underscores the enormous need to tighten international rules. Yet Rogoff said he doubts countries can agree. Some 18 months after the collapse that triggered the Great Recession, no deal on stricter rules is in sight--domestically or globally.
With oil prices up by $30 per barrel over a year ago, the energy industry is showing more interest in this year's auction of offshore federal leases off the coasts of Louisiana, Mississippi and Texas. The Minerals Management Service says 67 companies submitted 642 bids on 468 tracts in the central Gulf of Mexico. The winning bids will be announced at Wednesday's sale in New Orleans. Last year's sale in the central Gulf was conducted with oil around $50 per barrel--and attracted only 476 bids on 348 tracts in the key energy producing region for the United States. That sale garnered $703 million in winning bids. In 2008, with oil well above $100, the sale set a record $3.67 billion in high bids.
Saudi Arabia's oil minister says he expects OPEC oil production to remain steady for the rest of the year. Ali Naimi's comments come as oil ministers for the 12-nation production group prepare to meet for talks on output. Saudi Arabia is OPEC's top producer and usually sets the lead on how much the organization should be producing. Oil is trading at just over $80 per barrel on the New York Mercantile Exchange.
Royal Dutch Shell says it will boost production by 11 percent by 2012 from 2009 levels, slightly more than previously forecast, and sell assets and cut more jobs. The targeted output rise, to 3.5 million barrels of oil per day, would reverse a decade of production declines at Europe's largest oil company. Shell says it plans up to $3 billion in annual asset sales in coming years, disposing 15 percent of its refining capacity. It expects up to $30 billion per year in capital expenditures. Shell added around 3.4 billion barrels of oil to proven reserves in 2009. The company said it will cut 2,000 jobs before 2012--1,000 more than previously announced.
The Federal Reserve repeats its pledge to hold interest rates at record lows to foster the economic recovery and ease high unemployment. But its decision draws one dissent. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, for the second meeting in a row opposes keeping the yearlong pledge. The tension illustrates the Fed's challenge in deciding when to signal that higher rates are coming. Hoenig thinks the economy is strong enough for the Fed to telegraph that rates will rise soon to prevent inflation. But the others think the low rates will continue to be needed to feed the economic recovery.
Treasury prices are rising after the Federal Reserve described only slight improvements in the economy. The Fed said businesses were spending more, but at the same time the housing and labor markets remain weak. The Fed, as expected, left short-term interest rates unchanged. The yield on the ten-year Treasury note maturing in February 2020 has fallen to 3.66 percent from 3.70 percent late Monday. Its price is up 1 1/32 at 99 23/32. The yield of the ten-year note is linked to interest rates on mortgages and other consumer loans.
Four massive container cranes that have dominated the view at Galveston's Pier 10 for decades are being demolished. One towering boom, among those built in the 1970s, was brought down Monday. Owner Richard Perez of Houston says the demolition process is expected to take 30 days. Perez, owner of CRP International, bought the cranes nearly two years ago from the Port of Galveston in a $40,000 deal meant to generate scrap metal. The agreement was for the cranes, used for handling cargo, to be removed by August 2008. The Galveston County Daily News reports that falling scrap metal prices delayed the demolition, leading the port to threaten to repossess the cranes and charge storage fees. Perez blames the weak economy and a decline in scrap metal prices for slowing the removal, which began last week.