On Tuesday, the Commerce Department stated that new home sales increased 2.2% to an annual rate of 546,000 in May, the best monthly rise in sales since February 2008, reports Josh Mitchell for the Wall Street Journal.
“While we have yet to see whether the recent momentum in housing will sustain, there’s no doubt that we’re in a healthier and more robust market where consumers stand to benefit,” Bill Banfield, Quicken Loans vice president, said. “With inventory slipping a bit, expect to see home construction pick up the slack in the coming months.”
David Seaburg, Cowen and Co.’s head of sales trading, believes that the improving economy and concerns over a rate hike in the foreseeable future have pushed more buyers into the housing market. [Rising Mortgage Yields Could Weigh Down Housing Market, Homebuilder ETFs]
“There’s going to be a lot of people trying to get ahead of this rate hike,” Seaburg said on CNBC. “And more importantly, I think that when jobs do improve, they’ve been very concentrated to the cities. I think that will spread out a lot more and it’s going to spur a lot of demand in suburban-type areas for housing.”
SPDR S&P Homebuilders ETF
For more information on the housing market, visit our homebuilder category.
Max Chen contributed to this article.