Financial Dispatch: Home prices slide 14%

Andrew Torgan
CNN Financial News Producer

The steep slide in home price accelerated at a record pace during the first three months of 2009.
The national median home price of single family homes sold during the first quarter fell 13.8% to $169,000 year over year, and 6.2% compared with the last quarter 2008, according to the National Association of Realtors. That was the largest year-over-year decline in the 30-year history of the report.
The NAR attributed much of the loss to two factors: First-time homebuyers, who are often entry-level buyers, accounted for about half of all purchases during the quarter. And many buyers took advantage of the deeply-discounted prices of foreclosed properties and short sales. These “distressed properties” typically sell for 20% less than traditional homes, according to NAR. These homes also accounted for about half of all transactions.
Trade Deficit widens
The U.S. trade deficit rose in March for the first time since last July as the global recession cut sharply into sales of American exports.
The Commerce Department says the deficit widened to $27.6 billion in March, slightly lower than the $29 billion gap that economists had forecast. The politically-sensitive trade deficit with China also increased.
Ford seeks to raise cash
Ford Motor says it will offer 300 million common shares in a public offering to help meet funding requirements for retirees’ health benefits
Based on Monday’s closing stock price, the offering could raise nearly $2 billion dollars. The automaker says it will use part of the profits to pay into a health care trust for its retired workers under its agreement with the United Auto Workers union.
GM stock falls to 76-year low
General Motors stock plunged 23% to a 76-year low this morning, a day after a group of GM executives disclosed they had sold shares in the struggling automaker.
Six GM executives, led by former GM Vice Chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker.
The sale underscores the pressure on GM with less than three weeks remaining for the automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.
750,000 jobs by August?
The Obama Administration estimates that the economic stimulus plan will create or save 750,000 jobs by early August, a senior administration official said Monday.
The comments came as the administration’s Council on Economic Advisers released a report that explained the methodology behind its estimates for how many jobs will be created by the $787 billion stimulus package.
The report touts — as stated previously by the White House — that the plan will save or create 3.5 million jobs by the end of 2010. It also points to even bigger job creation and savings of 6.8 million jobs by the end of 2012.
Crude touches $60/barrel
Crude oil prices topped $60 a barrel level in electronic trading this morning as investors focused on signs of economic stabilization and a weaker U.S. dollar.
Oil last settled above $60 a barrel on Nov. 12, when it ended at $62.41.
Gas prices surge 10%
Gas prices have surged nearly 10% over the past two weeks.
That’s a gain of 20 cents during the past 14 days, and the national average hit $2.248 a gallon on Tuesday, according to AAA.
There is a silver lining, however: Analysts say a return to $4 a gallon gas is not on the horizon. Even though prices have been on a tear, they’re still some 46% lower from the all-time high of $4.114 a gallon hit last July.
Memorial Day travel to rebound
Despite that recent run-up, Memorial Day travel is expected to rebound this year, thanks to the overall decline from 2008’s record-high gas prices and discounts on hotels.
According to AAA, a total of 32.4 million Americans will travel at least 50 miles from home to mark the holiday weekend. That’s an increase of 1.5% from last year, when soaring gas prices cut the number to 31.9 million.
Baggage fees top $1 billion
U.S. airlines took in a record $1.1 billion in bag fees in 2008 after staring to charge for all checked luggage in an effort to cover rising energy prices, according to data from the U.S. Transportation Department.
Traditionally, airlines would only charge a fee for passengers who exceeded the baggage weight limits or who would want to check more than 2 pieces of luggage. United Airlines was the first U.S. carrier to break with the practice by charging $25 for a second checked bag starting in February 2008. US Airways announced it would start charging $15 fee for the first bag starting July 2008.
Most carriers now follow this practice of charging $15 (each way) for the first checked bag and $25 (each way) for a second checked bag.