Wither the Housing Market?

From RealTrends.com: Unit sales have been flat to down for the past 8 months. As you can see from the chart below after falling four months in a row from February 2014 through May 2014, they have risen somewhat for the last two months with June 2014 being surprisingly strong. After starting strongly average prices of what is being sold have slowed down measurably since. The good news is they are still trending up.

The recent news about stronger than expected new home starts buoyed the stocks of such firms as Realogy and RE/MAX as well as the overall stock market. Construction means spending and spending supports employment so this is a good trend. However, keep in mind that most of the increase was in multi-family and not in single family starts which remain anemically below the level of 1995-2005.

With slack demand for mortgages we expect rate increases to remain quiet for the foreseeable future – a piece of good news. Banks are still awash in lendable reserves but mortgage and small business loan levels remain well below what would normally be expected. Employment while up is dominated by part time jobs and average family incomes remain well below the levels prior to 2007.

Housing sales in most segments and markets will remain flat to slightly up over the rest of the year with the potential surprise mostly on the upside. Brokerage firms and sales agents should plan their business accordingly.