Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
US Overdosing on Debt - 19th Mar 19 -
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Improving U.S. Housing Market?

Housing-Market / US Housing Apr 25, 2012 - 02:42 AM GMT

By: Asha_Bangalore

Housing-Market

Best Financial Markets Analysis ArticleSales of new homes fell 7.1% in March to an annual rate of 328,000, hold your breath and don’t be disappointed. The level of sales would have been much lower if the sales of new homes of February had not been revised to an annual rate of 353,000 from the earlier estimate of 313,000 and January’s sales was 318,000 and not 329,000 as the report shows today. Essentially, there were upward revisions of new home sales from December (small upward revision) through February, which has changed the recent trend of new home sales. The 6-month moving average of new home sales has risen to 331,000 in March, up 13.7% from a low of 291,000 in October of 2010 (see Chart 1). So, the good news is there is a small pickup in sales of new homes.


While we are looking at new home sales, it is instructive to peruse data of existing home sales also. Sales of existing homes fell in February (-0.7%%) and March (-2.6%) but increased in January (+5.7%) and raised the quarterly average. The 6-month moving average of existing home sales in March is 4.468 million units, up nearly 15% from a low of 3.888 million units seen in April 2009 (the low of 2010 is excluded because the wide swings were related to the first-time homebuyer credit program (see Chart 2). The main conclusion is that much like the market of new homes, sales of existing homes show a small but noticeable upward trend.

Hopping back to the market for new homes, in March, sales of new homes dropped in the Midwest (-20%) and West (27%) but rose in the Northeast (+7.7%) and South (+3.1%). Inventories of unsold new homes rose to 5.3-month supply during March from a downwardly revised 5.0-month mark in the prior month. The historical median for the inventory-sales ratio is 6.0-months, which implies that the current inventory of unsold new homes is not problematic. The median price of a new single-family home slipped slightly to $234,500 in March from $236,900 during February.

Speaking about home prices, the Case-Shiller Home Price Index for February moved up 0.2%, a rare monthly gain. As shown in Chart 4, the stretch from early 2006 – February 2012 is marked with few monthly gains, with most related to the first-time home buyer program that was in place during most of 2009-2010. But, the Case-Shiller Home Price Index fell 3.5% from a year ago and dampens the enthusiasm related to the monthly increase. The question now is if the February increase is the beginning of a long line of monthly gains in prices of homes. In February, thirteen out of the 20 metro areas posted an increase in the home price index on a monthly basis, but only two metro areas (New York and Miami) show gains from a year ago. It is entirely possible that the February data are a precursor of more positive tidings from the housing market given the recent developments in the labor market. But, it is premature to declare all is clear because home prices are yet to stabilize, let alone posting sustained gains, and home foreclosures and negative equity remain a significant source of concern.

In sum, Chart 5 (quarterly count of home sales and starts) shows that sales of homes are moving up gradually and a mild upward trend of housing starts is also evident. Inventories of unsold homes are not worrisome as they were several months ago and home prices are not in a free falling mode. This brief description of housing market developments should have been better after 11 quarters of economic growth. But, current circumstances are atypical and the turnaround in home sales visible now is noteworthy. Data revisions are possible which could change the current assessment, particularly that of new home sales which are reputed for large revisions.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2012 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules