(Source: Daily Commercial News)
The U.S. housing market just got the best news it has received in many years. Sales of new single-family homes jumped 11.0% month to month in June.
New home sales have been trending upward throughout 2009. At 384,000 units, they are still exceptionally low – for example, in mid-2005, they were nearly 1.4 million – but they have been trending gradually higher throughout this year. Furthermore, they are only one-half of the story.
There is an international aspect to the improving housing market in the U.S. For Canada, it holds out the prospect of better times ahead for the forestry sector in many provinces. Increasing lumber exports should be the result, although there will be obstacles in the form of the strong-valued loonie and the usual objections to imports from U.S. sawmills.
It is also interesting to note that an improvement in housing markets is one of the primary forces behind China’s improvement in GDP growth (+8% year over year) in the second quarter of this year. To finance its massive infrastructure program, China is increasing its money supply even faster than in America. Loans in China in the first half of this year were double what they were during the same period last year. There has been a spillover effect on the consumer spending side that has seen auto sales accelerate. A boom in housing markets is also appearing, which has already led to worry about a bubble effect.
Read Alex Carrick’s full article “Housing is pulling U.S., Canada and China out of recession” in the Daily Commercial News (August 18, 2009).