by Kenneth R. Harney
Harsh weather conditions held back home sales in February — leading to some renewed gloominess by Wall Street analysts.
But several new economic reports, including on employment, suggest that during the coming several months we’re likely to see steady but unspectacular national economic growth, and some pretty good housing rebound numbers to boot.
Even the February home sales numbers were nowhere near as negative as you might expect under the circumstances. Existing home sales were down slightly for the month – by six tenths of a percent – but were still clicking along at more than 5 million on an annualized basis.
Sales in the Northeast region, which took the brunt of the storms, were actually up by nearly 3 percent! Median prices in the northeast gained seven and a half percent!
New home sales were harder hit – down by 2.2 percent for the month. But median prices on new homes sold for the month jumped by six percent over January and were up five percent year over year, according to the Commerce Department.
In California, median home prices rose 11 percent in February and total sales were up by 8 percent, according to MDA Data Quick.
And look for that rising-value trend to continue in many parts of the country, according to statisticians at First American CoreLogic. In a new report they forecast home prices are likely to gain four and a half percent over the coming 12 months. Take out distressed sales from the equation – and prices would otherwise gain 5.6 percent.
A new study by economists at the Federal Deposit Insurance Corp (or FDIC) also provides a positive take on where we’re headed. The US housing market, according to the FDIC, is showing “tangible signs of improvement”. Affordability – which is obviously a crucial factor in whether households can buy or not – is at “historic high levels,” says the report.
Economists at UCLA weighed in last week with their own projections. Not only will there be no so-called “double dip”—that’s the bad news scenario where the US economy slips back into recession sometime this year – but the economic expansion will continue rolling along at a two to three percent quarterly rate of increase in the gross domestic product or GDP.
Meanwhile, last week’s new filings for unemployment insurance dropped much more than analysts had predicted. This suggests that maybe – just maybe – we’re finally on the verge of seeing some new job creation and fewer layoffs.
Bottom line: Don’t get bogged down by the economic naysayers and snow storms. The national economy — and housing — are moving ahead on a recovery path.
Published: March 29, 2010