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Rise in new home sales, prices point to U.S. housing recovery
Topic Started: 24 May 2012, 11:15 AM (1,210 Views)
Mike
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http://business.financialpost.com/2012/05/23/rising-new-home-sales-prices-point-to-u-s-housing-recovery/

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WASHINGTON – New single-family home sales rose solidly in April and prices pushed higher, offering further evidence the housing market was turning the corner.

The Commerce Department said on Wednesday sales increased 3.3% to a seasonally adjusted 343,000-unit annual rate after a 332,000-unit pace in March.

The report, whose details were fairly bullish, came on the heels of news on Tuesday that home resales hit a two-year high in April and suggested the housing market recovery was gaining traction.

It also highlighted the economy’s underlying strength, even though job growth has slowed in recent months. The weak housing market had been the Achilles heel of the economy’s recovery from the 2007-09 recession.

“It’s encouraging. These are signs that we might be forming a bottom in housing,” said Omer Esiner, chief analyst at Commonwealth Foreign Exchange in Washington. “We’ll need to see housing shore up before we can talk about a meaningful recovery in the U.S.”

Compared to April last year, new home sales were up 9.9%. Signs of life in the housing market were also bolstered by a 4.9% rise in the median price of a new home last month to US$235,700 from a year ago.

A separate report from the Federal Housing Finance Agency showed house prices rose 1.8% in March after gaining 0.3% in February. Prices were up 2.7% from year ago.

The improving housing market picture helped Toll Brothers Inc, the largest luxury home builder, report a higher-than-expected quarterly profit and a strong jump in new orders.

“The spring selling season has been the most robust and sustained since the downturn began,” Chief Executive Douglas Yearley said in a statement.

Despite the rise in sales, the housing market continues to be hamstrung by an oversupply of previously owned homes on the market — especially from foreclosures, many of which sell well below their market value.

A separate report from the Mortgage Bankers Association showed applications for loans to buy houses fell for a second week in a row last week, even though mortgage rates dropped to a record low.

While the inventory of new homes on the market rose 1.4% to 146,000 units last month, it remained near record lows. At April’s sales pace it would take 5.1 months to clear the houses from the market, down from 5.2 months in March.

New home sales last month were buoyed by a 28.2% jump in the Midwest. Sales in the Northeast rose 7.7%, to the highest level in over a year, while in the West sales soared 27.5%. Sales were down 10.6% in the South.

New home sales account for about 7.6% of the overall housing market and face stiff competition from previously the owned home segment despite low levels of stock.
http://mike-globaleconomy.blogspot.com.au/
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Mike
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US housing recovery hits home

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US housing recovery hits home by: Justin Lahart From: The Wall Street Journal May 23, 2012 9:28AM Increase Text SizeDecrease Text SizePrintEmail

EVIDENCE of a recovery in the US housing market has been piling up since last (northern) autumn, but there has been a good reason to be skeptical of it: Data from the cold months, when housing activity slows, are a less-than-certain gauge of the market's health.
But now the US is entering the thick of the home building and selling season. And the data continue to flash recovery.

Adjusted for seasonal swings, an annualized 4.62 million previously owned homes were sold in April, the National Association of Realtors reported yesterday. That was the best month since January and 10.5 er centthan a year earlier.

Bcause April is when sales start to heat up, the figures were adjusted downwards Unadjusted, 400,000 homes were sold last month - 4.8 million at an annual pace. With the exception of 2010, when federal home-buyer tax credits inflated sales, it was the strongest April since 2007.

Other housing data are also having a good spring. Last week, the Commerce Department reported that ground was broken on 45,800 new single-family homes in April, not seasonally adjusted, up 21 per cent from a year earlier and the most since April 2010. The National Association of Home Builders' measure of foot traffic from people shopping for new homes this month hit its highest level in over five years. Average prices for framing lumber are 33 per cent higher than a year ago, according to lumber-industry newsletter Random Lengths.

All of which is good news for the shares of home builders, which in recent years have been in the habit of rolling over in the summer. It is good news for the broader market, too: A housing market in recovery could be just the cure for the summertime blues.

Read more: http://www.theaustralian.com.au/business/wall-street-journal/us-housing-recovery-hits-home/story-fnay3x58-1226364217900
http://mike-globaleconomy.blogspot.com.au/
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NotFooled
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The Bear Whisperer

Interesting to speculate on what a recovery in the US would do to global confidence in the markets. Maybe enough to cancel out the European concerns?
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Elastic
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The US recovery is a mirage fuelled by massive government budget deficits.
Only a rat can win a rat race.

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Mike
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NotFooled
24 May 2012, 12:20 PM
Interesting to speculate on what a recovery in the US would do to global confidence in the markets. Maybe enough to cancel out the European concerns?
If the US economy does continue to grow at a 3%+ pace it will help to boost exports from China and give Europes economy some needed support. The real momentum will come when the US can reach about 4% growth, this will really drive down unemployment, you would see a solid recovery in the housing market, China & Europe would benifit greatly in this scenario.

Europe will keep most of the headlines for now, but for those of us who invest in shares, I would look to the US markets. They are well undervalued when compared to profit reports, mainly draged down by Europe. But the fundementals of US corporations are strong, and share values should be much higher. The US will slowly build while Europe takes the headlines until it dawns on the world, then watch one of the biggest rallies we have seen since the 1990s.

http://mike-globaleconomy.blogspot.com.au/
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Elastic
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If the Australian government was consistently running $150B budget deficits would you consider any rise in economic activity to be due to any other factor?

Would you think that things are looking rosy for the future of the Australian economy?



Only a rat can win a rat race.

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miw
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Very good presentation of the data and some good discussion here:

Real Estate - A Good Investment Again?

Reading the comments is instructive. Still a lot of bearishness out there, but that is to be expected, since bearish sentiment increases until *after* the market has turned most of the time. (Just as bullish sentiment increases until some time after the markets start a downtrend).

Edited by miw, 24 May 2012, 04:36 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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peter fraser
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Some info on US Real Estate from last night.

VIDEO

Edited by peter fraser, 24 May 2012, 05:36 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Starlightdiscs
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peter fraser
24 May 2012, 05:35 PM
Some info on US Real Estate from last night.

VIDEO

No recovery ever, if jp Morgan is losing so is everyone. YouTube Detroit . Have a look around. The dictatorship and nazi style propaganda machine is at work. Election year next year, obama and his banker mates have virtually altered their constitution and vitally made it null and void. Created wars without their own senate voting. All this without the media batting an eye. So you ar reading there is a housing recovery .....lol.......
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Maveri
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peter fraser
24 May 2012, 05:35 PM
Some info on US Real Estate from last night.

VIDEO

Peter, you always seem optimistic about US housing :-)

You probably think I always stalk you on US housing lol (i.e. the past discussions on Detroit no-existent housing recovery)

Anyhow...

That was one of the better discussions I've heard out of the overly CNBC optimistic machine of late

However, I think these guys are far more switched on that the CNBC folk, although they are more talking about residential housing than commercial in the US

pimco vs shilling housing bull vs bear debate

My personal view is that the Pimco folk are a bit too optimistic and that the Shilling clan are more grounded in the overall make-up of the US economy

J P Morgan blunder

Either way - there is no full blown US recovery - just like the MF Global crime the J P Morgan exposure may not see the true light of day either - people having their money lifted out of segregated accounts and even having it dragged back via a clawback provisions after they took their money out of MF Global - absolute total swindling. Already there is talk of the J P Morgan mess blowing out to double what Jamie Dimon finally admitted to despite saying only a few months ago that everything was running sweet - these people are pathological liars
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