US housing gives a reason to cheer

By Incorrect Author 26 November 2009

Housing starts are a really important US economic indicator. Especially as sub-prime mortgages were basically responsible for the global economic meltdown. So now that sales of newly built homes rose to the highest level in more than a year, it may be time to start cheering, as the supply of these homes has also dropped to new lows. When demand outstrips supply in such a vital economic area, it simply means consumers are spending and banks are lending. Apart from keeping a beady eye on inflation, that’s what just about every government in the world wants. Purchases of single-family homes in the US rose 6.2% in October from September to a seasonally adjusted annual rate of 430,000, the US commerce department says. Some regions, including the Washington DC area, posted a 23% gain. In all, sales were up 5.1% from a year earlier. It’s worth keeping an eye on these figures as the US crawls out of recession. An earlier report showed a surprising 10.1% surge in sales of existing homes in October. Low prices and historically low interest rates helped boost the sales, as did an $8,000 tax credit for first-time buyers – which was recently renewed. Any upside in this market is a positive thing. Read more: Washington Post, BusinessWeek, Washington Post, BBC, BusinessWeek, Washington Post

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