Pending Home Sales, Construction Spending Up In March
The battered economy got a couple of pieces of good news moments ago in two real estate reports released moments ago.
The Commerce Department reported that construction spending in March unexpectedly rose .3 percent, following five straight months of declines.
Though home construction remains soft -- the nation has an 11-month supply of new housing inventory to burn off -- Commerce reported March increases in non-residential and government construction.
Meanwhile, the National Association of Realtors reported that March pending sales of previously occupied homes rose 3.2 percent from February to March, as buyers took advantage of depressed housing prices and low interest rates.
The Ticker would caution reading too much into these two pieces of good news. Despite the massive government economic stimulus, which is spurring construction spending and will continue to do so for some months down the line, government spending alone cannot maintain construction growth. And until private construction companies can get agreeable financing, they will stay on the sidelines.
As for housing, until or unless that 11-month inventory of unsold news homes is purchased or bulldozed, the residential housing market will remain stagnant.
May 4, 2009; 10:25 AM ET
Categories: The Ticker | Tags: Commerce Department, National Association of Realtors, housing crisis
Save & Share: Previous: Markets Up at Opening
Next: Obama Demands Overseas Banks Reveal U.S. Taxpayer Holdings
The comments to this entry are closed.