US Department Of Commerce Report States That Single Family Home Sales for
June Increased By 1.4% over May
By Brian Noer
July 28, 2005
A report released
yesterday by the Commerce Department
stated that the sale of single-family homes had hit an all time high as of
June 2005. June saw a 4% increase over the month of May, hitting a high of
1.37 million units per annum. The report also stated that orders for big
ticket manufactured items rose by 1.4% over May. This news was taken by
market analysts as a further sign of an economy that is gaining ground fast,
with the Federal Reserve calling the economic expansion “solid”.
Shares of many of the major homebuilders rose on
Wednesday subsequent to the release of this report: Lennar Corp. increased
24 cents to $65.84, D.R. Horton Inc. gained 53 cents, rising to $40.93 and
Pulte Homes Inc. rose 56 cents to $92.27.
Analysts expect that the Fed will announce higher
interest rates after their August 9th meeting, in order to keep
inflation in check as the economy grows. Low mortgage rates were said to be
responsible for a record number of existing home sales in June. The median
price of existing homes reached $219,000, up 14.7% over the same month last
year. This represents the biggest increase in the past 25 years. The price
of new homes, however, declined by 5.5% in June, to $214,800. New home
prices had set a record this past April at $232,600.
Analysts speculated that rising interest rates might
slow the homebuilding sector somewhat as mortgage rates rise, but they also
agreed that the sector is not likely to suffer a burst bubble.
Brian Noer
Brian Noer has
a degree in Business and Economics from the
University
of
Western,
Ontario.
His career in the financial markets spans fifteen years and several
continents, including: Manager with The Bank of Montreal in Canada,
Associate Analyst with the structured finance group at Moody’s Investor
Services in the UK, and Editor for several financial trade magazines in the
UK for both Thomson Financial Publishing and Euromoney PLC (titles include
Thomson’s trade magazines “The International Securitisation Report”, and
“Capital Market Strategies”, and Euromoney’s “Asset Finance International”).
Brian recently joined the InvestorIdeas.com portal team as a Writer, Editor
and Research Associate.
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