US Housing Market Working As It Should Do – New Home Sales At 7 Month High

We’ve a useful indication that there’s nothing broken in the American housing market here. This does not, of course, mean that everything is perfect in this sector, only that we are seeing what we should see if the normal bits and pieces of supply, demand and prices are working. US extant house sales are slowing a bit on a shortage of supply and price rises. That’s as it should be, if supply is short then prices should rise and this will deter some of the demand. At the same time we’d also expect to see an acceleration of new housing sales, as those looking for somewhere to live substitute from the extant stock to the new. And this is just what we’re seeing, a rise in new housing sales, in fact a 7 month high: Existing home sales declined in February as tight inventory and rising prices frustrated would-be buyers and damped sales activity heading into the critical spring selling season.

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Source: Forbes

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