The latest data point, out today, on the resurgence of US housing is on pending home sales (i.e., deals for which a contract has been signed but which haven’t closed). These rose more than expected, pulling the National Association of Realtors pending sales index up to a level not seen since 2007. (If, that is, you throw out the surge of sales in 2009, which was artificial, due to tax credits designed to spur sales during the the worst of the US recession.)
“Since this is very volatile data we prefer to rely on the trailing 12-month moving average for guidance of trend, and this remains strongly positive reaching 99.0 in October, its best level since October 2007 (excluding tax credits),” wrote Michael Shaoul, chief executive of money management firm Marketfield Asset Management, in a note to clients. “Even if we were to witness a little “give back” in a subsequent monthly report the data supports our notion that US housing is on a strong recovery path.”
For the most part, the data point in the right direction, even if new home sales released earlier this week were slightly softer than expected, thanks to Superstorm Sandy’s visit. Home prices are rising and so are numbers on homebuilder confidence, all of which are good signs for the US economy.