US Housing Has A Secure Foundation

There are several questions surrounding the US housing industry. For example the pace of housing starts, new and pending home sales, all deserve serious consideration.

In this short essay, Forbes attempt to map out take on this critical activity for the level of aggregate demand.

Read below:

Based on data from the US Census Bureau sales of previously owned homes in the US rose by a little more than 5% in May, and the new home sales increased in May to a more than seven year high.  What does this really mean?

The economic record shows that sales of previously owned houses in the US surged 5.1% to an annual rate of 5.35 Million units in May from an upwardly revised 5.09 Million in April. This was the highest since November of 2009.

In a similar vein “New Home Sales” increased to 546,000 in May 2015 from 534,000 in April 2015. It is the highest level since February 2008. This statistic averaged 655,060 from 1963 until 2015, reaching an all-time high of 1.389 Million in July of 2005 and a record low of 270,000 in February of 2011.

So clearly, the market has moved a long way from the lows…however, one is lead to enquire if there is a full recovery of the real estate market?

Housing Starts in the US decreased to 1.036 Million in May 2015 from 1.165 Million in April 2015. That said I am encouraged to see Building Permits in the US increase to 1.275 Million in May 2015 from 1.140 Million in April 2015.

For existing homes the median sale price went up 4.6% and the months’ worth of supply decreased to 5.1. That in itself is an encouraging number and yet the recovery is not universal across all US neighbourhoods. Many smaller blue collar or working-class suburbs experienced a rapid price increase during the housing boom a decade ago. This was followed by a price collapse of dramatic proportions.