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Us Housing Sales/prices Go Ballistic

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Bubble 2.0 shifts into overdrive as Yellen da Felon temporises.

New U.S. single-family home sales surged to a more than eight-year high in April and prices hit a record high, offering further evidence of a pick-up in economic growth that could allow the Federal Reserve to raises interest rates soon.

The Commerce Department said on Tuesday new home sales jumped 16.6 percent to a seasonally adjusted annual rate of619,000 units, the highest level since January 2008.

March's sales pace was revised up to 531,000 units from the previously reported 511,000 units. Economists had forecast new home sales, which account for about 10.2 percent of the housing market, rising to only a 523,000 unit-rate last month .The percent increase was the largest since January 1992.

New home sales are volatile month-to-month and April's increase probably exaggerates the housing market strength.

Still, last month's gain pushed new home sales well above their first-quarter average of 531,667 units. New home sales increased in three regions, but fell in the Midwest.

The report came in the wake of fairly upbeat data on home resales and residential construction. It also added to retail sales and industrial production reports in suggesting that the economy was gathering speed after growth almost stalled in the first quarter.

Minutes from the Fed's April 26-27 policy meeting, published on Wednesday, showed most officials considered it appropriate to raise rates in June if data continued to point to an improvement in second-quarter growth. The Fed raised its benchmark overnight interest rate in December for the first time in nearly a decade.

The dollar rose to session highs against the euro and the yen after the new home sales report, while prices for U.S. government debt extended losses. The PHLX housing sector index hit a one-month high.


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What the hell? Have our povertylater brethren identifed the US as the next big BTL hotspot and gone balls deep on a load of condos to just rent out?

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didnt the U.S have an actual housing crash though? i suspect if it forces rates to rise over there it will cause a tidy crash here when rates rise here

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This article is about the number of houses being built - not their prices. There is no bubble in prices at the moment.

For details of that, see http://us.spindices.com/indices/real-estate/sp-case-shiller-us-national-home-price-index .

The price index is at about 176, Peak level in 2006/07 was about 180. Lowest level in 2012 was 134 i.e. 30% off peak. but with wide inter-city variation - Florida, Nevada, Arizona lost more than 50%; San Francisco, DC, never really fell; Boston did not bubble in 2006 - it was still recovering from 90's bubble, so never fell back either.

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