Wednesday, August 26, 2009

Housing Market Emerges From Slump

WASHINGTON/WSJ -- New-home sales climbed more than anticipated in July, staging their fourth straight month of strong gains to add to evidence that the housing market is emerging from its long slump. Sales of single-family homes increased by 9.6% to a seasonally adjusted annual rate of 433,000 compared to the prior month, the Commerce Department said Wednesday.

That was the highest number sold since September 2008 and well above projections for a 1.6% gain to 390,000 by economists surveyed by Dow Jones Newswires. The increase was the fifth in seven months, as buyers are returning to the market in search of bargains. The market for new homes appears to have bottomed in January, when sales hit 329,000 (see chart above).

MP: Commerce also reported that the supply of new homes fell in July to 7.5 months, the lowest inventory of new homes in more than a year (see chart above), and almost 5 months below January's peak reading of 12.4 months, providing more evidence that the real estate slump is ending.

Originally posted at Carpe Diem.

4 Comments:

At 8/26/2009 12:09 PM, Anonymous morganovich said...

this one is tricky. banks are holding a large number of foreclosed homes off the market to keep from swamping prices. i've seen all manner of estimates, but it's very difficult to know what kind of number is credible.

 
At 8/26/2009 12:30 PM, Anonymous Benny The True Market-man said...

Strong durable goods orders posted today as well. Also, I heard a report on the radio about employers looking to do some hiring. Conference Board reported better consumer sentiments.
This recession is ending, and good riddance.
Frankly, I think we are on the cusp of a 20-year global boom, and only current pessimism, the result of a deep recession and the always-depressing Bush Presidency, is preventing most people from seeing the very bright future ahead.
Never before has the globe created such huge mountains of investable capital, and never before has there been so many R&D shops across Asia, Europe and the US. The Internet speeds information dispersal.
Asia is already growing again, and I suspect it will keep growing for decades and decades.
The US needs to extract itself from our follies in the 'stans and Iraq, and then we will ride the boom too. Obama seems intent on making matters worse, but I guess we will leave Iraq in 2010, and thank goodness. What a drain on our Treasury. (BTW, there is a chance Iraq will become a major exporter of oil in next 10 years--if they don't screw everything up, which they likely will).
While people are obsessing about health care, it is a sideshow--the private economy will boom whether we have national h/i or not.
I ask my doomer friends this, and they always shut up: Can you name a single promising energy technology, or even somewhat promising energy technology, that is not being robustly financed by venture capitalists or industry?
The venture capital community is 20 times as large as the 1970s. At least. There is gobs of hedge fund money and private-equity money to be thrown at any good idea.
All the US needs now is a stable financial system, one that does not fall down in a stiff breeze.
Happily enough, the Obama team, on this score, seems to have a nice stable of talent, and they actually show up for work, unlike the Bush team. Maybe the Obama team can get Congress to go along with some good ideas.
I would like to see some ideas posted here, on creating a failsafe financial sector.

 
At 8/27/2009 4:04 AM, Blogger 1 said...

I have absolutely NO idea if this is valid information or not...

Yet morganovich's comment is what made me wonder and hence the link...

From: MISH'S Global Economic Trend Analysis dated Aug. 21 '09: Hidden Backlog of Foreclosures

There is this from Housing Predictor dated June 8, 2009: 10-million homeowners will be foreclosed through 2012 as more mortgage holders are unable to refinance their mortgages because of falling home values or give up at the prospect of holding on to their homes all together...

 
At 8/31/2009 9:16 AM, Anonymous Anonymous said...

The "duh" thing to consider is that the blue line is intrinsic to the sales rate. It will drop precipitously if the sales rate blinks upward, as the number of new homes is basically fixed ... They ain't makin' new homes right now, so it HAS to drop like a roller coaster.
tomw

 

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