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The Housing Market

June 27, 2012 – 5:07 pm

It has been rare over recent years that anything positive can be said about the housing market so when we get better than expected news from that sector I am compelled to write about it. Early in the week new home sales for May rose sharply to 369,000 when the expectation was for it to be 348,000. This was a two year high. This morning the Pending Home Sales Report rose 5.9% for May, much better than expected. Pending home sales are contracts to buy that have been signed but the deal has not closed.

Also the Case/Shiller 20 city survey which tracks prices showed a rise in prices of 1.3% month over month.

More importantly of these reports was the issuing of building permits which have also spiked. This tells us that the builders are going to start construction on more homes than in the past. The number was 380,000 or so.

Make no mistake the housing market is still weak but with extra low mortgage rates and banks seemingly willing to want to approve loans we have finally seen clear evidence that the housing market has hit a bottom. Note I did not say it was a strong housing market, just that things are looking up, FINALLY!

Good Trading
Steve Peasley

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