- by New Deal democrat
Yesterday I wrote that durable goods orders showed that manufacturing is still weak. The contrary side of the economy showed up later yesterday morning with new home sales.
New home sales are notoriously volatile, and heavily revised, but they do have the redeeming virtue of frequently being the very first housing series to turn. And in September, even though they were down slightly from August, showed that lower mortgage rates have ignited a rally in the housing market:
The three month moving average, which does away with a lot of that volatility, made a new expansion high.
Meanwhile new house prices continued to show a big YoY decline:
Since prices generally follow sales, this was to be expected. As sales continue to improve, new home prices should follow suit shortly.
The turnaround in housing this year due to lower interest rates is probably the single most positive forward-looking aspect to the economy.
