May existing home sales were up a stronger than expected 1.1%, yet the bond market barely moved. Thank God, since you know good news is bad news for interest rates.
The May new home sales were up 7%, which is slightly stronger than expected but it is summer time. 😉
A question I get a lot lately is “Is the market at its peak again and about to turn downward?” I thought it best to quote a smart guy whose job it is to analyze and educate on these things.
Per Larry Baer, one of the economists that I follow says:
“Even with the solid May gain, the pace of sales remains at less than half of the peak in 2005. Nationally, builders have added fewer new single-family housing units in the ten years ending in 2016 than in any ten year period since 1990. Limits in terms of available labor and developed lots are likely to continue to limit new home construction in 2017.
Even so, low mortgage rates, a solid general labor market, and modestly rising wages continue to drive steady demand which pushes prices higher. The median sales price in May was $345,800, up from $310,000 in April and $296,000 in May 2016.
It is important to remember the new home sales data is always subject to significant revisions. The Commerce Department says they are 90% confident the values they reported this morning will ultimately land somewhere in a range between a 10.1% drop to a 15.9% gain. Yep – no kidding – just another example of where the old saying, “that’s close enough for government work” came from.”