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Now this is a real surprise, the good kind.New home sales surged 11% in the past month, to a seasonally adjusted rate of 384,000, according to the Wall Street Journal(subscription required).
The Commerce Department reported that year over year, sales are still down 21.3%. The median price was $206,000 in June, down 12% from $234,000 in June 2008.
Continue reading Is the housing slump over? Sales of new homes surge 11% in past month
Sales of new homes fell by 37.8 percent from 2007 sales. Total sales in 2008 were 482,000 compared to 776,000 (the total sold in 2007), according to Mission Residential. The median new home price dropped by 9.3 on a a year-over-year basis.Continue reading New home sales fall by 37.8% from 2007 levels to lowest level on record
Several major pieces of economic news were released this morning, and all were good. Personal Spending rose more than expected, the fastest growth in two years. The Chicago PMI report rose more than expected as well. The Michigan Consumer Sentiment report seemed to hold its own. In addition, the core inflation number came in within the Fed's target range.
This is a major contrast to the numbers earlier in the week. Durable Goods and Consumer Confidence reports were terrible, and both Existing and New Home Sales indicated that there appears to be no end in sight for the housing slump. The only good number was Second-Quarter GDP. However, this was prior to the turmoil created in the markets by the credit crisis.
Then, why did the stock market rally on the bad news and is going down today on these positive economic reports? It's the liquidity. The stock market is driven by money and credit. As there is greater availability and lower cost, the market performs better. Who is the ultimate gatekeeper for this? You guessed it: the Federal Reserve.
Continue reading The economy and the Fed: When good news is bad!
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