Some Positive Signs in Today's New Home Sales Report for a Significantly Improving Housing Market
As Brian Wesbury and Robert Stein point out today,
"The lack of availability of completed new homes is likely holding back sales, which will improve even more as builders finish some of the homes now under construction. We see the same phenomenon in the existing home market, where a lack of homes on the MLS is temporarily holding back sales. The road ahead looks better than it has in years. Look for housing to continue to move higher, and to add to GDP for the fifth consecutive quarter."
Scott Grannis also reports today on new home sales in May, which were up by almost 20% from a year ago and reached the highest sales level in more than two years, and new home starts, which were up in May by more than 26% from last year, and comments:
"To be sure, the level of sales and starts remains very depressed from an historical perspective. But from an economist's perspective, it's not the level that is important, it is the change on the margin. Correctly viewed, there has been a very significant improvement in the housing market over the past few years."