With Up Beat Housing Data, Where Will Tuesday’s S&P/Case-Shiller Number Be?

While worries about Europe and Greece dominate the news, the data on housing and the US economy is looking good.  Over the last two to three weeks we’ve had a string of good numbers right up to this morning’s jump in consumer sentiment reported by the University of Michigan Survey Research Center at 79.3,  the best level since 2007.   For housing most of the figures covering April were positive with housing starts up 2.6% from March, existing home sales up 2.9% at 4.62 million, and new home sales up 3.3% at 343,000 units.  One of the few weak numbers was for permits for new construction, off 7% but still consistent with the strong starts numbers.  In contrast to the permits figure, the National Association of Home Builders (NAHB) sentiment survey advanced to 29 from 25 in March, showing that builders are becoming more optimistic.

Trends in the rest of the economy support the better numbers for housing. Initial unemployment claims, a widely followed short term indicator of employment trends, has been holding steady near 370,000 in recent weeks, suggesting modest growth for the economy.  The ever-watchful Fed seems to agree and has deferred, for now, any additional easing.  Interest rates remain low and mortgage rates are at or close to record lows.  However, cheap money is only half the mortgage story — banks, as seen in the Fed’s latest Senior Lending Office Survey, remain cautious with very few lenders lowering loan qualification rules. 

Home prices are even seeing some positive figures. The National Association of Realtors figures saw prices of existing homes up 1.8%. This series, based on median prices, can be pushed higher if buyers shift to larger homes.  The FHFA series, covering only homes financed with conforming mortgages, rose as well.  The S&P/Case-Shiller data for March will be out Tuesday and give a broader view of home buying in the US.

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