Home sales probably climbed last month to their highest level since November 2009, showing residential real estate is becoming a mainstay of US economic growth.
Combined purchases of existing and new houses rose to a 5.74 million annualized pace last month, according to the median forecasts of economists in a Bloomberg survey. Other figures may show manufacturing is improving, eliminating a source of weakness for the expansion.
The housing gains will probably be sustained as would-be buyers with access to credit rush to lock in mortgage rates before they climb much more. The construction-industry rebound, combined with rising demand for automobiles, is contributing to a stabilizing in manufacturing that will help the world’s largest economy gain momentum in the second half of the year.
“The housing market is clearly recovering this year about as fast as you’d expect in a normal expansion,” Boulder, Colorado-based Action Economics LLC chief economist Mike Englund said.
The rebound is “a big plus for June, July manufacturing,” along with improvement in the auto market, he said.
Sales of previously owned homes rose to 5.26 million annualized pace last month from 5.18 million the previous month, according to the median forecast of economists surveyed before the National Association of Realtors’ report today.
On Wednesday, US Department of Commerce data will show purchases of new homes increased to a 484,000 pace last month, the highest level since June 2008, according to the median forecast in the Bloomberg survey.
A report last week showed builder confidence rose this month to the highest level in seven years as companies grew more upbeat about sales prospects.
KB Home, based in Los Angeles, is among companies enjoying improving demand for housing.
“Housing dynamics are significantly better than they were a year ago,” KB Home chief executive Jeffrey Mezger said in a June 27 earnings call. “We are still in the early innings of a recovery that is continuing to accelerate. The positive factors underpinning the current housing recovery remain fully in place and will continue to drive favorable market fundamentals.”
Speculation that the US Federal Reserve is getting closer to paring its bond buying has caused mortgage rates to increase. The average rate on a 30-year fixed loan was at 4.37 percent in the third week of this month, up from a record low of 3.31 percent in November last year, according to data from Freddie Mac.
US Federal Reserve Chairman Ben Bernanke tried to reassure markets during his two-day semi-annual testimony before the US Congress last week that the central bank is monitoring the situation.
“We will be watching to see if the movement in mortgage rates has any material effect on housing,” Bernanke said during questioning before the House of Representatives Committee on Financial Services. “If we think that mortgage-rate increases are threatening that progress, then we would have to take additional action in the monetary sphere to try to address that.”
Builder shares have suffered over concern that the increase in borrowing costs will hurt demand.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last