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Wealth Creation and Preservation

August 22, 2012 – 5:21 pm

A report out this morning told us that existing home sales rose 2.3% in July, a lagging economic indicator. Though the number was in line with expectations the market rose from its sell off in early trading. It regained the flat line by 7:00am.

However, should the market be happy with this news? It was nice to see prices climb by a surprising 9.4% but inventory grew and that wasn’t good news.

We will have new home construction numbers later in the week but those will also be backward looking. Still the bright spot of higher prices in today’s report provides a relief of sorts to the battered consumer. Because the economy is 70% driven by consumer spending maybe the consumer will feel a little bit wealthier at the increased value of their home. Anything that makes the consumer feel more secure may support spending and that is good for everybody.

Good Trading
Steve Peasley

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