People buying houses again
A good sign.
For the first time in seven months, new home sales in the United States rose in February. Many market analysts were concerned that the rise in housing starts was only weather-related.
Turns out, if you build them, they will come. New home sales increased 4.7 percent in February 2009. That’s a massive improvement over the 13.2 percent plunge home sales took in January.
Old-fashioned economics
Of course, the rise in new home sales was accompanied by a drop in prices. However, the data still shows that people are becoming less timid about purchasing homes and getting personal loans to be able to afford them. Also, it shows that the free market is working. Prices have finally dropped to a level that is acceptable to consumers, causing them to buy. It’s the first step on the way to growing the housing sector instead of shrinking it.
Not like the good old days
Of course, The Wall Street Journal feels it necessary to point out that home sales now are a lot lower than they were last year. Even with the jump, new home sales were more than 40 percent lower than they were in February 2008. What were they expecting? We are headed in the right direction.
Pessimism unrewarded
Another good sign is that home sales were much higher than economists at Dow Jones Newswires predicted they’d be. Those economic experts predicted home sales would fall 2.9 percent in February. So it seems the economy is healing faster than expected.
More good news
Realtors also reported that existing home sales were higher in February than in January. That is great news, given the number of empty homes sitting on the market now. Prices have been falling steeply, which often causes people to hold off on buying in case home values go even lower. Perhaps the wait is over?
Baby steps
It’s true that one month of rising home sales doesn’t necessarily mean the recession is turning around. It’s true that home sales could fall this month. But, hey, we have to take what we can get.
This is a good sign, and as long as it isn’t just the typical post winter bump then things may be in better shape than a lot of people have been saying we are in. It isn’t too surprising that many home starts are for rental properties, though.
I really hope this means things are turning around for the better. Oil prices have started to rise also, maybe this is a positive sign.