Housing Has Legs

Surprisingly strong housing numbers out this morning: new single-family homes rose 16.6% in April to an annual pace of 616,000 (see chart below), well above expectations, and up 23.8% over the past year. Supply of new homes fell to just 4.7 months, all due to faster sales (inventories were flat). Sales are up strongly in the Northeast, solidly in the South and West, although down in the Midwest. The median ($321,100) and average ($379,800) prices jumped 9.7% and 13.5%, respectively, the last year.

There is more to come. The graph below shows the data from 1963. We may never reach the 2005 peak of 1.328 million (or, maybe we will), but housing will continue to strengthen because job growth and wages are rising, and home ownership is still low. Housing has legs.

• 27 Oct, 2014

  The Present is the Future (at least in bond land)

  In our long-term assumptions, we generally assume that the total return in fixed income is pretty close to its starting ...

• 10 Jun, 2026

  Beach Reading

  Summer is upon us, and while not light reading, I have some new recommendations for your beach reading. Enjoy!FictionThe ...

• 21 Aug, 2017

  For What It's Worth

  In the summer of 1966, throngs of young people crowded the Sunset Strip in Los Angeles to hear their favorite bands. ...