Weak Housing Markets? Latest Data Shows Lack of Supply!

Ben Bernanke, Federal Reserve Chairman

Ben Bernanke, Federal Reserve Chairman

Existing-home sales declined 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April, according to the National Association of Realtors. These figures are 9.6 percent above the 4.15 million-unit pace in May 2011.

Existing-home sales include single-family homes, town-homes, condominiums and co-ops. According to Lawrence Yun, NAR chief economist, “The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand.” In plain-speak, there are not sufficient homes available to sell!

Total housing inventory at the end of May slipped 0.4 percent to 2.49 million existing homes available for sale and the national median existing-home price for all housing types rose 7.9 percent to $182,600 in May from a year ago.

Housing, especially the lower priced housing, is turning out to be a relatively bright spot amid the gloomy macroeconomic backdrop. Whether this is because of Bernanke’s extraordinary measures to prop the housing market is debatable; nonetheless, the average 30- year fixed mortgage rates have been hitting record lows around 3.66 percent.

Even as the country experiences high unemployment rate and slow growth rate, there has been a severe shortage in lower priced homes in much of the country except the Northeast, data from the NAR shows.This scenario is clearly logical, as consumers adjust to an elongated period of weak recovery and high unemployment they might want to buy lesser priced homes than they would have bought in an otherwise optimistic outlook.

Stocks of Home Builders like Toll Brothers (TOL) and Lennar Corp (LEN) were down slightly in afternoon trade.

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click Here to Read Comments
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!