New home sales jumped 11 percent last month, the biggest month-to-month gain in eight years:
The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000. Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.
The number of homes builders have on the market dropped 4.1 percent in June, to 281,000. This big jump is probably another sign that the economy is in or will soon be in recovery. (Just don’t tell Secretary Geithner.) The fact that people are comfortable enough to spend money on a home is good. That banks are originating mortgages is good. And the size of the jump probably indicates a feeling in the market that now is a good time to buy because housing prices may start going up if the market recovers.
Unfortunately, given the $13 trillion in taxpayer money used to fight the recession, the two big spending bills in Congress right now—energy and health care—plus the Wall St. reform bill, we’re not quite out of the woods yet as a double dip, “W” shaped recession is likely.