Confidence, housing gains signal growth
Surges in home sales, consumer sentiment give economy a boost
Tuesday, February 26, 2013
Clark County’s January home sales showed year-over-year improvement in terms of total sales, price and the shrinking inventory of listings for sale, according to Portland-based RMLS, which counts only sales brokered by licensed real estate professionals. RMLS found the county’s closed sales totaled 329 in January, an 11 percent increase over 297 sales in January 2012. January’s median sales price — half sold for more, half for less — also increased to $210,000 in January, up from 26 percent from $166,000 during the same month last year. January’s inventory of 2,052 active Clark County listings was the second-lowest number for a single month in the past five years.
WASHINGTON — Purchases of new homes surged in January by the most in two decades and consumer confidence jumped this month, signs of a rebound in U.S. economic growth at the start of 2013.
Home sales surged 15.6 percent to a 437,000 annual pace, exceeding the highest forecast in a Bloomberg survey and surging from a 378,000 rate in the prior month, figures from the Commerce Department showed Tuesday in Washington. The Conference Board's consumer sentiment index climbed to 69.6, also beating all estimates in a Bloomberg survey.
The figures bolster Federal Reserve Chairman Ben Bernanke's view that the fourth-quarter slump in growth will prove temporary as the central bank's efforts to keep interest rates low help households repair finances. Rising property values may underpin consumer spending, benefiting retailers such as Macy's, even as an increase in the payroll tax reduces take-home pay and gasoline prices climb.
"Housing is now kicking into higher gear," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Penn., who was the best confidence forecaster over the past two years, according to data compiled by Bloomberg. "The next few months are still going to be a struggle for households as fuel prices are elevated, but the improvement in confidence reduces the risk of the worst-case scenario."
Bernanke on Tuesday defended the central bank's unprecedented asset purchases, saying they are supporting the expansion with little risk of inflation or bubbles in stocks and bonds.
"We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery," Bernanke said in testimony to the Senate Banking Committee in Washington.
The median estimate of 72 economists surveyed by Bloomberg called for U.S. new-home sales to climb to a 380,000 annualized rate. Estimates ranged from 355,000 to 409,000.
The level of sales last month was the highest since July 2008 and the percentage increase from December was the biggest since April 1993.
Another report Tuesday showed home prices in 20 U.S. cities rose in the 12 months to December by the most since July 2006. The S&P/Case-Shiller index of property values increased 6.8 percent from December 2011 after advancing 5.4 percent in November, the New York-based group said. Nineteen of 20 cities showed gains.
The Conference Board's sentiment index jumped in February from a revised 58.4 in January, data from the New York-based private research group showed. The measure's 11.2-point jump was the biggest since November 2011, offsetting much of the almost 15-point slide over the previous three months.