Two reports out this week showed a strong up move in sales of homes. First, the housing starts report showed 1.256 million homes were under construction for November. In the existing-home sales report 5.32 million changed hands, both numbers were better than expected.
For new starts most of it was in multi-family units. That does not make that report bad but single-family homes starts were down 4.6% and they are considered the barometer of health of new construction of homes. Still permits, which are a leading economic indicator, rose to 1.328 million up 5%. Existing-home sales rose by 1.9%, though still down by 7% from a year ago. Also, homes stayed on the market for 42 days before they sold; up from 36 days the month before and 40 days a year ago.
What was very interesting in the existing-home sales report was that they went up in every region in the United States except in the west where sales fell 6.3%.
The housing market is healthy but clearly it has peaked and with the Fed raising rates most predict the housing market will weaken further as most experts see 30 year mortgage rates rising to 5% or more next year. That is a barrier from many people entering the market place.