Business is picking up!!!

Who would have thought that real estate could be one of the select few bright spots in the economic landscape.  Although housing is by no means robust, it is certainly on the mend.

Existing home sales rebounded 2.3 percent in July to a 4.47 million annual rate in a gain that partially reverses a 5.4 percent decline in June. The annual rate hit its recovery peak in January this year as warm weather spurred counter-seasonal buying. The rate has since been choppy, but hopefully the July gain will be the beginning of a new upswing.

In more signs of home strength, median home prices are up 9.4% from the same time last year.  This reflects the greatest improvement since the beginning of the housing recovery and is an indication of overall improvement for the market. Other details show sales gains in 3 of 4 regions with the West at no change.

New homes are continuing to rise reporting an increase of 3.6 percent in July to an annual unit rate of 372,000. This is 10,000 above the Econoday consensus and the best of the recovery outside of stimulus driven sales in the spring of 2010.

The rise in total sales is drawing down supply, which explains the very strong readings in the monthly home builders' housing market index. Supply at the current sales rate is 4.6 months which is down from 4.8 months in June and compares with 6.7 months a year ago.  Thin home supply has been limiting sales in recent months and looks to be a continuing factor in keeping sales growth slow.  Many real estate professionals throughout the U.S. are reporting increased buyer traffic.

Investors in the stock market continue to remain on the sidelines for what appears to be two reasons.  First it is the typical end of the summer slow down in which many people take vacation.  In other parts of the country many families are also focused on getting their children back to school.

The second reason is that many investors are waiting and hoping that the Fed is going to announce another round of stimulus in the coming days or weeks,.  Fed Chairman Bernake has not given any indication that the Fed is ready to take action now however, investors continue to believe the fed will take action.  Investors continue to keep an eye on some of the weaker than expected economic indicators and that is where the hope lies that the Fed will be prompted to take action.

The jobs market is improving, but only slowly.  Initial jobless claims for the week of August 18 week are up 4,000 for a second straight week to 372,000 (prior week revised 2,000 higher to 368,000). But prior weeks in late July and early August show a net decline, making for a favorable month-to-month comparison with the July trend.

Next week is a light economic data week.  When you combine that with the end of the summer trading lull, it is not expected that there will be much happening in the markets.

JJ Mack