Housing Rebounds Strongly

One way to take your mind off of sequester week is to look at today’s report on home sales. It’s good.

Sales of new homes shot up 15.6% in January to an annual rate of 437,000. That’s the fastest pace since the middle of 2008. Not only this, but the inventory of unsold new homes dropped sharply to a mere 4.1 months supply, which is the tightest inventory since 2005.

Most of the action was in the West, where sales rose 45.3%; and in the Northeast, where they rose 27.6%. Although the latter may be due to the warmer weather in December, so that pace may not last long at all. Obviously these rates of growth are absurd and won’t last long, but they point to growth and thus jobs.

All this didn’t push prices up. In fact prices fell about 9%, implying that buyers are interested in smaller and cheaper homes than during the ridiculous bubble years.

Oh. And January’s pace of sales was up 29% compared with a year ago.

So at least real estate is steadily recovering.