US Housing Market

Our Second Recovery scenario for next year received a lift from November’s Housing Market Index, which was reported yesterday by the National Association of Home Builders (NAHB). It rose to 46 last month, the highest reading since May 2006. It is highly correlated with single-family housing starts. The NAHB’s index of traffic of prospective home buyers was unchanged at a 6½-year high of 35, up 17 points since April.

Existing homes sales rose 2.1% during October after falling 2.9% during September, and remain on a slow uptrend. Helping to boost demand is that single-family home prices are starting to move higher. The median price rose 10.9% y/y during October, the fastest pace since January 2006. Rising home prices should revive long-dormant buy-in-advance attitudes in the housing market.

 

The recovery in home prices is helping to boost consumer confidence. Imagine all the homeowners who have negative homeowners’ equity, which may be turning less negative. Some of them might be able to refinance their mortgages. In early November, the Consumer Sentiment Index jumped 2.3 points to 84.9, the highest since July 2007. This improvement was confirmed by the recent strength in the Bloomberg Consumer Comfort Index.

Today's Morning Briefing: Thanksgiving. (1) Count our blessings. (2) Second Recovery scenario gets a lift from homebuilders. (3) Existing home prices up more than 10%. (4) Consumer confidence still rising in November. (5) Energy independence for the US. (6) So why is capital spending depressed? (7) The US economy is a coiled spring. (8) Risk On/Off and all that jazz. (9) What if falling off the cliff is off? (10) There’s still some energy in the global economy. (More for subscribers.)