Housing Starts 1-22-13

TRADEX GLOBAL INTERNAL COMMENTARY

Sales of existing US homes took a dip in December.  Purchases fell 1% to a 4.94 million annual rate.  The reading was still the second highest since November 2009.  Even with the December dip, 4.65 million homes were sold in 2012, the most since 2007.  This is quite positive, as the level of inventory is the lowest in a decade. Keep nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Sales of U.S. existing homes unexpectedly fell in December as supply shrank, underscoring the hurdles for an industry seeking to strengthen its recovery even as it completed its best year since 2007. Purchases fell 1 percent to a 4.94 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The reading was still the second-highest since November 2009. The median forecast of 79 economists surveyed by Bloomberg called for a gain to a 5.1 million rate. “We saw housing gain momentum throughout last year, and clearly a little dip doesn’t take that away,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, who projected a drop to a 4.95 million annual rate. “For the first time in a while, it looks like it’s a sellers’ market as much as it’s a buyers’ market. I suspect prices and sales will go up again in 2013.” The usual drop in supply at this time of year and a pickup in demand spurred by historically low mortgage rates, a firming job market and growing households risk keeping inventories lean, pushing prices even higher. The median price of an existing house climbed 6.3 percent in 2012, the most since 2005. Stocks climbed to five-year highs on better-than-forecast earnings from companies including Travelers Cos. and Freeport- McMoRan Copper & Gold Inc. The Standard & Poor’s 500 Index rose 0.4 percent to 1,492.56 at the close in New York.

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