Good and bad signs for the U.S. housing market
Construction workers build new houses on a residential building site on November 21, 2011.
Jeremy Hobson: It is one step forward, one step back for the housing market. The mortgage bankers association says this morning applications for home mortgages were up 3.3 percent last week but demand for refinancing dropped for the sixth straight week.
Here to explain what’s going on is our regular Wednesday guest, Josh Brown of Fusion Analytics. Good morning, Josh.
Josh Brown: Hey Jeremy.
Hobson: So what does all this mean for the housing market?
Brown: Yeah so the fun part with housing data is it’s never a clear picture --
Brown: -- and there’s always some good data points and then some bad ones come out. So it’s still a little bit muddy but I’ll tell you what I found interesting: We’re seeing some really positive sales data and commentary from some of the largest home builders in the country.
Toll Brothers most recently talked about this being the strongest spring in five years, and we’re also seeing sales up. Companies like Singh up 30 percent; Lennar up 33 percent. So there is definitely some strength in some areas in the country in new home sales and that’s important because that’s definitely one of the more leading data points when you look at all the various things that we follow with housing.
Hobson: But how do you square that with the data we got this week that home prices still were falling in January?
Brown: You know, it’s interesting. You can’t, you can’t really square it because a new home is different than an existing home and so I don’t know if this means you’re in for the fabled housing bottom that everyone’s been calling for five years but again, it’s another sign of strength.
I’ll give you one market in particular: We’re hearing that in Phoenix, which was really a horrendous real estate market, originally you had a situation where they had 14 to 16 months worth of supply, now it’s more like a more normal 4 to 6 months or in that range. So I think that’s again, a local story but I think it bears watching because some of the data is really starting to turn up.
Hobson: Josh Brown, of Fusion Analytics. Thanks as always.
Brown: Thank you.