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Existing home sales climb at the fastest pace since February 2007

Akin Oyedele
american flag barn iowa

(REUTERS/Jim Young) A cow stands in front of barn painted with a U.S. flag in Homestead, Iowa, March 7, 2015.

We just got more confirmation that the housing market recovery is intact.

On Wednesday, we learned that existing home sales jumped at the fastest pace since February 2007. Sales rose 3.2% month-over-month at an annualized pace of 5.49 million, while economists had forecast a rise of 0.9% at an annualized pace of 5.40 million.

In the release from the National Association of Realtors, Lawrence Yun noted that the last two months have been the strongest for sales since early 2007.

"This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy," he said.

On Friday, we also got housing data that posted eight-year highs from the Census Bureau, which reported that housing starts rose 9.8% to an annualized pace of 1.174 million, the highest since July 2007. Building permits, which point to the pace of future construction, rose 7.4% to an annualized pace of 1.343 million.

At the same time though, home prices are picking up.

In Wednesday's release, NAR president Chris Polychron said, "the demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price. "Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they're not optimistic they'll have adequate time to find an affordable property to move into."

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(FRED)
And as we highlighted over the weekend, the housing market is reflecting the bigger macroeconomic stories, and pointing to what the second half of 2015 may look like after a lackluster first.

Deutsche Bank's Jo LaVorgna spelled this out in a note to clients on Tuesday: 

"We remain positive on the housing outlook. The economy has created nearly 3 million jobs over the past year, the unemployment rate is almost a percentage point lower, and consumers have saved well over $100 billion in energy costs over the last 12 months. Moreover, as we highlighted in the latest US Economics Weekly, commercial banks continue to ease lending standards for mortgages ..."

" ... In short, there are several positive tailwinds for the housing sector that should result in a more pronounced pickup in activity over the next several quarters. If this is the case, policymakers should become more confident that consumer spending, which accounts for roughly 70% of GDP, is on firm footing."

 

And it's not just economists that are bullish on housing. The Federal Reserve's latest beige book noted an uptick in real estate activity in several of its 12 districts.

The bullish signs are everywhere.



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