Wednesday, December 26, 2012
Wells Fargo's November Housing Summary
Expectations for home sales and new home construction have increased considerably in recent months as the underlying fundamentals have improved. Housing is one of the few areas of the economy that has been left essentially unshaken by the uncertainty surrounding the fiscal cliff. We have repeatedly noted that home sales and new home construction will almost certainly strengthen in 2013, even if overall economic growth decelerates. This apparent contradiction owes itself to the slow but steady improvement in the operating fundamentals for the housing market, including 33 straight months of private sector job growth and rising housing formations. Steady buying by investors has also helped reduce distressed home inventories. With supplies dwindling, home prices have improved across much of the country, which is helping bring trade-up buyers back into the market.