This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

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 Trulia.com.

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,684.67 +6.77 0.04%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs