Afternoon Note
Existing home sales for April came in at an annual pace of 5.57 million, down from March, and lower than Wall Street consensus. The headline miss and disappointment mask more critical parts of the report that underscore positive trends and sobering realities.
First time buyers’ shows a 34% gain from 32% a year ago, which dovetails with additional data pointing to millennial household formation. The more this number edges higher, the greater the positive implications beyond housing. As wages improve, first time buyers could become 40% of total buyers.
Supply is down to 1.93 million, 9% lower than a year earlier, underscoring what Mr. David V. Auld, CEO of D.R. Horton, told me in my office last week, “We have lost a generation of carpenters and workers with homebuilding skillsets.”
Consequently, there is only 4.2 months’ worth of supply, well below the 6.0 months average in a heathy market.
Wages on the Move
Speaking of wages, according to Sentier Research, household incomes in America have surged this year. In April, household incomes increased $59,000 to $59,361 a gain of 1% from March and up 2% since January, the highest level since February 2002. The pace in three months, with an increase of 1.7%, actually exceeds the increase over the course of the entire Obama Recovery.
Key Levels and Dates
Its clear household income has trailed the rate of inflation for a long time, but the good news is this kind of momentum has not been seen in a long time, and we could be on the cusp of significant income gains.
Comments |
Wages are stagnant, but income inclusive of benefits has increased 7-10% year over year as a result of the ACA John Livingston on 5/24/2017 3:15:41 PM |
How can ACA be included as a "benefit" when it is a tax that families of five pay $1,000 per month for NO coverage of medical care, medication, ER visits, or surgeries! None! unless a $6,000 deductible is first met. Oh, perhaps it is a benefit if the person receiving it is not a tax payer but a recipient of subsidies...? How crazy is that. James Carley on 5/24/2017 9:00:26 PM |
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