As the economic recovery proceeds, the housing market will be a big factor in the recovery’s pace according to Curtis Dubay, Senior Economist, U.S. Chamber of Commerce. The latest numbers are encouraging. They suggest consumers are willing to take the risk of buying a new home and have the resources to make purchases. Interest rates remain low and the pent up demand from the delayed spring buying season give hope that housing market will play a key role.
Like all economic data, the housing measures were depressed substantially in March and April. However, all of them—with the exception of Existing Home Sales (-10 percent)—increased substantially in May. Pending home sales had the biggest leap, growing over 44 percent compared to a 22 percent decline in April. It declined a similar amount in March.
The NAHB Housing Market Index, New Home Sales, Building Permits, and Housing Starts, were all up smartly too after declines in March and April. Home prices ticked up by 1 percent in April and March. The strong housing market rebound is in line with other data points that show consumers returning to spending again, but the rebound is stronger in the housing market. This suggests consumers feel their incomes remain strong and will continue to be strong in the future.