Housing Has Legs

Surprisingly strong housing numbers out this morning: new single-family homes rose 16.6% in April to an annual pace of 616,000 (see chart below), well above expectations, and up 23.8% over the past year. Supply of new homes fell to just 4.7 months, all due to faster sales (inventories were flat). Sales are up strongly in the Northeast, solidly in the South and West, although down in the Midwest. The median ($321,100) and average ($379,800) prices jumped 9.7% and 13.5%, respectively, the last year.

There is more to come. The graph below shows the data from 1963. We may never reach the 2005 peak of 1.328 million (or, maybe we will), but housing will continue to strengthen because job growth and wages are rising, and home ownership is still low. Housing has legs.

• 9 Feb, 2015

  Where Have All the Bonds Gone?

  Apologies to Pete Seeger for stealing his song lyric, but I think bonds and flowers are sufficiently different that he ...

• 29 Jun, 2015

  Drama/Drachma

  Here we go again, as Ronald Reagan used to say. Asian equities off 2-3%, Europe down 3-4%, Treasuries rallying, gold up. ...

• 19 Mar, 2015

  Negative Yields

  One of the (many) perplexing phenomena facing investors is the persistent (and falling) low yields on government ...