New home sales disappoint, but trend remains positive
The Department of Housing and Urban Development reported that new home sales fell by 7.3 percent in December. But overall sales for last year were up to an estimated 367,000 homes — the best in three years.
“Yes, it’s getting better,” said Greg McBride, senior financial analyst at Bankrate.com. “But we’re still about 50 percent below what the pre-housing bubble normal levels were.”
“If you look at where the levels were back in 1998 or 1999, 2000,” he said. “We’re about half of that level right now. So, still a long way to go, although the trajectory is positive and as long as the economy continues to grow, I think we’re going to continue to see progression and improvement in the housing market.”
McBride said we’ll have to wait to see any impacts on other sectors of the economy, such as construction and manufacturing jobs.
“It’s coming from such a low level, it’s not enough that it’s going to move the needle on unemployment,” he said. “I think we need a much stronger economic environment, and then it becomes a self-reinforcing positive cycle where stronger economy, more disposable income, makes people more confident to go out and buy houses.”
As long as “Washington doesn’t run us off the rails,” said McBride, we can expect that confidence, and the econonomy, to contiue to grow and improve.
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