New Data Suggests Some Life In Sluggish Housing Market
According to the latest Commerce Department data, September US new home sales rose 3.1 percent from August’s rate to a seasonally adjusted annual rate of 593,000 units, and 29.8 percent above September 2015’s rate of 457,000 units. Reuters notes that despite the September home sales increase, the pace of new US home sales for the previous three months “was revised down by a total of 85,000 units from past estimates.” Other reports showed “a stronger pickup in economic growth,” as the “goods trade deficit narrowed sharply” and “wholesale and retail inventories increased in September.” Joel Naroff, Chief Economist at Naroff Economic Advisors, is quoted saying, “The housing market…is clearly moving forward at a steady pace,” but “the big problem is still the lack of inventory.”
In additional news about the US housing market, the AP reports that the latest Standard & Poor’s Horologic Case-Shiller 20-city home price index “rose 5.1 percent in August, after a 5 percent gain in July,” with Portland, Seattle and Denver reporting “the strongest year-over-year increases for the seventh month in a row.” Prices rose in Portland by 11.7 percent, in Seattle by 11.4 percent, and in Denver by 8.8 percent. Commenting on the housing price data, Zillow Chief Economist Svenja Gudell said, “Demand is high and enthusiasm for homeownership remains strong, especially among all-important young, minority and would-be first-time buyers. Still, the market can’t stay on this course forever, and continued inventory shortages are leading to intense competition.”
What This Means For Small Businesses
The latest housing market data may be an indication that there is a revival in the housing market. However, this data alone is unlikely to be enough to encourage small business owners to feel optimistic about future economic growth.
Reuters also covers the latest S&P home price index data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.