As the strong building permits in months passed and even continue today suggests, the new home sales report just released rose by 11.9% to 811,000. They revised upward November’s number to 725,000. Economists were projecting 51,000 fewer homes sold. It was a very good report. It is likely that the prospect of higher interest rates later this year is boosting current sales. Buyers are still seeking more space despite high prices and investment in rental units remains strong. Also, home buying plans for the next six months rose to a record high.
Despite the FED’s intent on raising interest rates and a disrupted supply chain, housing remains intact and strong, continuing its long-standing pillar of economic support in the U.S. That is not going to stop any time soon. The way it can be disrupted is a Federal Reserve pushing interest rates so high that the economy begins to falter and buyers bulk at the costs. The FED has done that in the past and they certainly can do it again.