Low Rates Boost US Existing Home Sales; IYR Up 0.3%
US Rises on Positive Earnings while Greece Weighs Down the Eurozone (Part 2 of 3)
Existing home sales increase by 6.1% in March
The April 22 report on Existing Home Sales issued by the National Association of Realtors seems to have turned the tables in favor of the housing market. There was some good news for the housing sector along with investors in the real estate sector, such as those invested in the iShares Dow Jones US Real Estate Index ETF (IYR). Existing home sales in the United States (SPY) (IVV) recorded a 5.19 million annualized figure in March versus 4.89 million recorded in February.
The figure came in above median expectations of 5.03 million units. Existing home sales in the United States saw an increase of 6.1% on a month-over-month basis and 10.4% over the previous year. Indicator releases pertaining to the housing market are particularly anticipated by REITs such as American Tower (AMT), AvalonBay Communities (AVB), and Equity Residential (EQR). On April 22, AMT was up 0.99%, AVB gained 0.94%, and EQR gained 0.63%.
Positive indicator reading from US housing sector
The US economy has seen investor confidence plummet in the housing market in the wake of the 2009 housing bubble. Investors are yet to establish a good level of confidence in the US housing market.
Growth in existing home sales in the United States has slowed down, especially after September 2014. The slowdown was due to two major headwinds: rising home prices and limited supply. The high home prices led to lackluster market demand, lack of investor confidence in the sector, and winter months that hindered construction and limited supply. With the spring season upon us, the US economy should see this tailwind recede soon.
A buoyant jobs market and low rates have acted as tailwinds for the sector.
While US investors were upbeat on positive indicators and earnings reports, investors in European equity became cautious, as consumer confidence in the area took a surprise blow in April.
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