The U.S. housing market it healing, right? That depends on which measure you’re using. This is not exactly new for the housing market, which is making a habit of keeping investors confused.
This time, the mixed message comes from two key statistics released today by the National Association of Realtors. The trade group said existing home sales “increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.”
However, in the same report, the NAR also said “The national median existing-home pricefor all housing types was $154,700 in January, down 2.0 percent from January 2011.”
Now, it could be that those lower prices – not to mention near-record low mortgage rates – are finally enticing would-be buyers who have been waiting for a bottom to finally start moving again.
That’s the spin NAR President Moe Veissi put on the report: “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”
America’s homebuilders are no doubt pulling for Veissi to be proved right. The homebuilder stocks have been one of the strongest sectors in the stock market during the past three months, with sector leaders Hovnanian (NYSE:HOV) up 127%, KB Homes (NYSE:KBH) up 59%, and Beazer Homes (NYSE:BZH) up 63%. The SPDR S&P Homebuilders Index ETF (NYSE:XHB) is up 26% in that same time frame. However, today’s reports did little to support that trend, with HOV falling 5% in Wednesday trading; KBH down 4.3%; and BZH sliding 4.8%. The XHB fund is also about 1% lower today.
Next up for major housing stats is Friday’s report on new-home sales for January from the Census Bureau. If the recent increase in homebuilder confidence is any indicator, you would expect new home sales to have risen. But nothing has been that straightforward lately for the housing market.