New Home Sales came in at 369,000 units (annualized) vs. the consensus for 388,000. On the surface, it was a disappointing report. But with the previous month's sharp upward revision (377K to 398K) more than offsetting today's weaker than expected number, the housing market continues to be one of the brightest spots of the economy.
Recent reports have pointed to a reduction in supply as impacting sales. Inventory levels currently stand at 4.7 months vs. more than 6.6 months just a few short years ago. With still record low interest rates and an improving economy and jobs market, housing looks like its recovery will continue in 2013 and even pick up more steam as the year progresses.
There have been a lot of doubters on the housing recovery, with many citing low prices as their reason for disbelief. But that's been one of the reasons for the increased activity. Affordability has come down to very attractive levels. And as consumers are feeling more confident about their own personal finances, they are realizing there are great deals out there, helping to fuel the steady recovery in housing. And now, given the increased demand and shrinking supply, non-responsive prices are starting to tick up again. That is another encouraging sign. And will likely create a little more urgency to get into that new house.
Tell us if you're seeing activity increase in your area. In the city of Chicago, where I live, I'm seeing plenty activity. There are, of course, pockets of strength and weakness across the country. But by and large more strength.
What does it look like where you live? Chime in and tell us.