The National Association of Realtors reported today that existing home sales jumped by 10.1 percent, to a seasonally adjusted annual rate of 6.1 million units. That is 23.5 percent higher than the October 2008 figure of 4.9 million homes, and is the highest number of sales since February of 2007.
The gain in sales took analysts by surprise. Analysts had expected existing h
ome sales to climb to an annual rate of 5.7 million, with estimates ranging from 5.2 to six million. So, the actual figure came in even higher than the most optimistic analyst.
The increase took even the National Association of Realtors by surprise. The normally overly optimistic organization said that the gains may have been driven in part by the anticipated expiration of the $8,000 tax credit for first time home buyers. Now that the credit has been extended and expanded, the organization said, "a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."
As you know, the downturn in the housing market helped start the economy on the path towards the worst recession since the Great Depression. A recovery in the housing market would go a long way towards pushing the economy back into growth.
Analysts say that the housing market is showing signs of a rebound. The jump in existing home sales was called a sign that there is a lot of demand in the housing market. Barclay's Capital called the gain "impressive" and said that "the housing market recovery will be a durable one."
The National Association of Realtors concurred. "Existing home sales have already bottomed. Home prices are almost there. We are seeing a less of a decline in house values," the organization's chief economist said.
Cabot Money Management said that the home sales numbers were a sign that it was a "relief" that the "tax benefits going into the housing market are working." They added that "everything is about housing and jobs right now."
So, the week opened up on a good economic note, and stocks will likely move up. Stocks of home building companies like D.R. Horton and KB Homes are likely to jump. Now the question is whether the rest of the week's economic data on GDP, consumer confidence, durable goods, consumer spending, new home sales, and jobs. It is a short week with the Thanksgiving holiday, but it's going to be full of economic data that will move markets.
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The gain in sales took analysts by surprise. Analysts had expected existing h
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The increase took even the National Association of Realtors by surprise. The normally overly optimistic organization said that the gains may have been driven in part by the anticipated expiration of the $8,000 tax credit for first time home buyers. Now that the credit has been extended and expanded, the organization said, "a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."
As you know, the downturn in the housing market helped start the economy on the path towards the worst recession since the Great Depression. A recovery in the housing market would go a long way towards pushing the economy back into growth.
Analysts say that the housing market is showing signs of a rebound. The jump in existing home sales was called a sign that there is a lot of demand in the housing market. Barclay's Capital called the gain "impressive" and said that "the housing market recovery will be a durable one."
The National Association of Realtors concurred. "Existing home sales have already bottomed. Home prices are almost there. We are seeing a less of a decline in house values," the organization's chief economist said.
Cabot Money Management said that the home sales numbers were a sign that it was a "relief" that the "tax benefits going into the housing market are working." They added that "everything is about housing and jobs right now."
So, the week opened up on a good economic note, and stocks will likely move up. Stocks of home building companies like D.R. Horton and KB Homes are likely to jump. Now the question is whether the rest of the week's economic data on GDP, consumer confidence, durable goods, consumer spending, new home sales, and jobs. It is a short week with the Thanksgiving holiday, but it's going to be full of economic data that will move markets.
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