This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Housing Is Better but Not Yet a Goldilocks Market

NEW YORK (TheStreet) -- April's first big piece of home-sales data is out, and it looks pretty good.

Existing-home sales rose 1.3% in April, from March, to an annual rate of 4.65 million units, the National Association of Realtors said.

That's a little short of the average forecast of 4.69 million homes but within the range of expectations. March sales were not revised, and remain at an annual pace of 4.59 million units.

The two best things: a 4.1% jump in sales in the western U.S., and an increase in the number of homes for sale.

The gain out West matters because the West's recent slowdown had been so mystifying, raising concerns about yet another hiccup in the start-stop recovery. Because the polar vortex this winter didn't visit the Pacific states, the slowdown in home sales in the first quarter in places like California raised concerns that the rebound in home prices, plus a gain in mortgage rates in the last year, was cutting into sales. Those gains have pushed the prices of buying a home in some markets close to, or even above, the cost of renting, and led to overvalued homes in markets such as Los Angeles, San Francisco and Miami, according to

The 16.8% increase in inventories to 2.29 million homes for sale is another sign that sellers' finances are improving, and that people are looking to move up. It is fairly powerful evidence that concerns about the 9.7 million homeowners who still owe more on their homes than they are worth -- a figure that's down by 40% since 2012 -- isn't keeping housing from continuing to recover.

The fundamentals of housing remain: Renting is cheaper than buying in all but a relatively few (but large) markets. Affordability is quite good, with the average first-time buyer making about 15% more than needed to buy the median-priced home nationally, according to the Realtors' group. The last piece is the job market -- which was excellent in April.

The next two big pieces of data that affect housing are Friday's report on new-home sales, and, of course, the jobs report for May on June 6. If jobs are solid, and affordability remains in good shape, the rest will slowly take care of itself.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs