Home Sweet Home?
To start off this week we learned that the sales of existing homes rose in May to a seasonally adjusted rate of 4.89 million, a level not seen since last October.With back-to-back months of improvement, some analysts predict that we may now be regaining some momentum lost during the frozen market of winter 2014. Lower interest rates are certainly helping as are firming inventory levels which now stand at approximately 4.5 months. As reported in the WSJ on 6/23/2014, "a larger inventory of homes could set up a virtuous cycle where the better selection draws buyers to the market, which in turn sustains price gains. That entices additional sellers to list."
Today we received more good news from the housing sector as the sales of new homes rose 18.6% during the month of May to stand at a level of 504,000 home sales per month, which is the highest level seen since May 2008. The increase in sales was the largest recorded since January 1992.
A rebounding housing sector is the last piece of the recovery puzzle. Does May performance mark the beginning of better days? We think so. For more insight, click on the link below for an article entitled "U.S. Consumer Confidence, new home sales hit six-month highs."
www.reuters.com/article/2014/06/24/us-usa-economy-idUSKBN0EZ1KX20140624
