Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Existing home sales fell 2.2% in October to an annual rate of 4.43 million
Supporting Image for Blog Post

 
Implications: After increasing 10% in September, existing homes pulled back 2.2% in October.  Some of the decline may have been due to the temporary moratorium on foreclosures, in which case the end of the moratorium may boost sales in November.  Regardless, we believe the underlying trend will be upward over the next year, as sales rebound without artificial government support. Although the data will zig and zag from month to month, we expect the rebound trend to continue until sales get back up to about 5.5 million units at an annualized rate.  And we expect the rebound even if mortgage rates float back upward.  As buyers get more confident about the state of the economy, private-sector job creation accelerates, and purchasers become more confident that their homes will rise in value rather than decline, they will be more willing to buy homes even if interest rates are higher.  For example, mortgage rates averaged about 7.5% in the late 1990s and were not an impediment to rising home sales.  Another idea to remember is that when other analysts talk about the "shadow inventory" of homes, you should think about the "shadow demand" for rental properties, which will fill vacancies elsewhere.  In other news this morning, the Richmond Fed index, a measure of manufacturing in the mid-Atlantic, increased to +9 in November from +5 in October.  The consensus had expected a smaller gain to +6.

Click here for the full report.
Posted on Tuesday, November 23, 2010 @ 11:38 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2023 All rights reserved.