The US Commerce Department reported Tuesday that new homes sales contracts for May reached 504,000 – an 18.6% increase from the prior month and 16.9% greater than May 2013. This increase was the greatest in six years and considerably higher than the 435,000 forecasted.
Some suggest this is a delayed rebound after a weak start to the spring selling season due in part to severe weather, a sluggish climb out of the great recession, and increased interest rates.
The facts will play out throughout the second quarter. All indicators are positive though. The Consumer Confidence Index surpassed the forecast of 83.5 and rising to 85.2; interest’s rates remain relatively low; hopes that banks will loosen their death grip on lending standards; businesses continue to hire employees leading to continued growth in the job market. Factor in all these interconnected components and a brighter home sales report is on the horizon.