On Friday, data released from the US Commerce Department came as a shimmering beacon of hope for the ailing US economy which had been scuffling amid a sharp rise in pandemic cases, as the sales of new US Single Family homes rose to a 13-year-peak last month as a multi-year low mortgage rate alongside a migration spree into the lower-density suburbs due to the pandemic outbreak had helped the US housing market outperform other sectors.
Apart from that, latest data on US new home sales came forth a day after the US existing home sales had reported an upsurge of 20.7 per cent last month following a three-month long slump, however, analysts remained sceptical whether an upbeat housing market could shore up the US consumer spending, a fundamental centrepiece of the world’s No.
1 economy’s fiscal affluence, since a steep lag in supply of new homes available for sales would unlikely to spur up the housing market further, suggested analysts.
Pandemic-led migration, lower mortgage rate ramp up new home sales to 13-year-peak
In point of fact, the upbeat Commerce Department data released earlier on Friday had also revealed an increase in homebuilders’ confidence in July alongside an acceleration in home constructions, while a number of real estate industry analysts were quoted saying that the pandemic crisis had allowed employees to work from home and students to join online classes, eventually fuelling up demands of spacious houses in the smaller low-density areas.
Besides, while another bunch of real estate industry analyst had told that a robust housing market could flesh up the retail sector as homeowners would likely to purchase household equipment such as furniture, gardening tools and other supplies, addressing the US housing market’s role to buffer the smothering US economy, a chief US economist at Bank of America Securities in New York, Michelle Meyer said following the reveal of Commerce Dept.
data, “Housing has a strong immune system. The shock disproportionately impacted the lower-income population who are less likely to be homeowners”. According to the US Commerce Dept.’s Friday’s statement, new home sales surged by 13.8 per cent to a seasonally adjusted 776,000 units on June, its highest level since July 2007, while the US Composite PMI (Purchasing Managers’ Index) that keeps track of manufacturing and services sector, scaled up to a figure of 50.0 this month compared to a reading of 47.9 a month earlier.