Implications: The new home market, which is typically the last piece of the housing puzzle to recover, is clearly improving. Sales were up 1.5% in March and a whopping 18.5% from a year ago. In fact, Q1 of 2013 was the best quarter of new home sales since Q3 of 2008. The months' supply of new homes -- how long it would take to sell the homes in inventory – remained unchanged at 4.4, but is still well below the average of 5.7 over the past 20 years and close to the 4.0 months that prevailed in 1998-2004, during the housing boom. This means that as the pace of sales continues to rise over the next few years, home builders will have room to increase inventories. After a large reduction in inventories over the past several years, builders look like they're getting ready for that transition. Inventories have increased in 6 of the last 7 months. The median price of a new home is up 3.0% from a year ago, and we expect prices to continue to move higher in the coming years. In other recent housing news, the FHFA index, which measures prices for homes financed by conforming mortgages, increased 0.7% in February (seasonally-adjusted) and is up 7.1% from a year ago. On the factory front, the Richmond Fed index, a survey of mid-Atlantic manufacturers, fell to -6 in April from +3 in March. Manufacturing reports have been mixed but are still consistent with mild plow horse-like growth in that sector and economy as a whole.
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Posted on Tuesday, April 23, 2013 @ 12:53 PM
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