Evidence regarding the
sustainability of the U.S. housing market recovery continues to build,
reinforcing several consecutive quarters of an improving outlook. The
favorable data includes the Case-Shiller 20 city index (noted in last
week’s Economic Insights) that has shown year-over-year price increases
of about 9.3%. The next Case-Shiller index will be released in late May
and we believe is likely to show a continuation of improved pricing
trends, as well as geographic broadening of the housing recovery.
During the past week, the additional favorable data included a rise in homebuilder sentiment, another sign
that the market seems to be recovering from earlier concerns about a spring swoon. More specifi cally,
the National Association of Home Builders (NAHB) Housing Market index for May reversed what had been a three-month slide in homebuilder sentiment with increases in most index subcomponents. That included an improved outlook with regards to prospective buyer traffi c interested in new homes, the current level of single family home sales, and homebuilder outlook for new home sales over the next six months, with the latter reaching a post-global fi nancial crisis high. At this stage of the recovery, as with much of the housing data, some degree of geographic unevenness is typical, and in this case it was homebuilder confi dence rising in all areas except the West. On the surface, weakness in that area was a bit unexpected because cities in the West have registered the highest year-over-year price gains in the Case Shiller Index. However, it may be that those western city U.S. price increases were, on the margin,However, as is the case with homebuilder confi dence, there is geographic variance in the strength of new home sales. Curiously, new home sales in April were strongest in the West, the same geographic area where builder confi dence was the weakest, as noted above. Conversely, new home sales fell month-over-month in the Northeast and Midwest, although it is possible that it was weather related.
During the past week, the additional favorable data included a rise in homebuilder sentiment, another sign
that the market seems to be recovering from earlier concerns about a spring swoon. More specifi cally,
the National Association of Home Builders (NAHB) Housing Market index for May reversed what had been a three-month slide in homebuilder sentiment with increases in most index subcomponents. That included an improved outlook with regards to prospective buyer traffi c interested in new homes, the current level of single family home sales, and homebuilder outlook for new home sales over the next six months, with the latter reaching a post-global fi nancial crisis high. At this stage of the recovery, as with much of the housing data, some degree of geographic unevenness is typical, and in this case it was homebuilder confi dence rising in all areas except the West. On the surface, weakness in that area was a bit unexpected because cities in the West have registered the highest year-over-year price gains in the Case Shiller Index. However, it may be that those western city U.S. price increases were, on the margin,However, as is the case with homebuilder confi dence, there is geographic variance in the strength of new home sales. Curiously, new home sales in April were strongest in the West, the same geographic area where builder confi dence was the weakest, as noted above. Conversely, new home sales fell month-over-month in the Northeast and Midwest, although it is possible that it was weather related.
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