Yesterday’s blog post focused on the strength of the consumer and the positive impact on the housing market. Also noted in that post was the consumer’s improved financial position versus the end of the financial crisis and the current limited draw down of one’s home equity. Then today, the U.S. Census Bureau’s new home sales report for October proved to be a strong one. Sales of new single family homes were reported at an annual rate of 733,000 for October. This compares to the consensus expectations of 707,000, with the high end of the range equaling 720,000. As the below chart shows, this level of new home sales is about average when comparing it to historical levels, of course excluding the over build leading up to the financial crisis. In an Econoday report it is noted, “new home sales are showing rapid acceleration.”
Finally, in a post by Bill McBride at Calculated Risk, he notes the inventory of completed homes is low, yet the combined total of completed and under construction homes is near normal. In other words, available housing stock seems to be about normal, also highlighted in yesterday’s post.
With a housing market that looks pretty favorable and a financially strong consumer, the consumer and housing parts of the economy appear not to be a concern at this point in time.