Existing home sales report on the agenda today
The blockbuster new home sales report yesterday has piqued interest in exactly how strong the housing market might be.
Today, data on US house prices and existing home sales should add to the debate. The FHFA house price index is first at 1300 GMT and expected to rise 0.3% in June. At the same time, the quarterly house price purchase index is due. At 1400 GMT, the existing home sales report is expected to dip to 5.51m from 5.57m but given the strength in new home sales, there are upside risks.
I believe there is significant upside left in US housing.
US house prices have accelerated at a far slower pace than neighbouring Canada, the UK and many developed countries. The reason is clearly the sub-prime crisis and the resulting psychological scars.
But those scars are healing and US house prices are now just 2.5% from the 2007 peak. That's despite ultra-low rates, high rents and an investment environment where yield is tough to find.
