The Lehmann
Letter (SM)
We’ve been
crawling for so long in the housing-rebound desert that any sign of an oasis
raises suspicions of another mirage.
For instance……….
This morning
the Census Bureau announced 369,000 new-home sales in May.
Take a look
at the chart and the latest report seems unremarkable. New-home sales have
stagnated under 400,000 since the depths of the recession. We will have cause
to cheer when sales break through 400,000 and then 600,000 and maybe even
800,000. But sales under 400,000 hardly seem cause for celebration.
New Home
Sales
(Click on
chart to enlarge)
(Recessions
shaded)
But there
were other (optimistic) data in the report. The supply of new homes for sale fell
from 6.6 months to 4.7 months over the past year, while the number of new homes
for sale fell from 169,000 145,000. Let's hope the glut of homes on the market has
shrunk to a level that will spur new building.
We're weary of mirages.
(To be fully
informed visit http://www.beyourowneconomist.com/)
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