New Single-Family Home Sales Increased 4.3% in January:
After slowing down late last year, new home sales have picked back up in December and January, up 19.3% from a year ago. In addition, the average price of new homes sold was $408,800, up 6.5% from a year ago. According to First Trust, this rise is due, in large part, to significant changes in work-from-home policies allowing workers the ability to move into the suburbs. Sales in the south are up 40.4% over the past year, while both the Northeast and West have declined.
Speaking of Home Prices:
According to The S&P CoreLogic Case-Shiller 20-city home price index, home prices rose 10.1% in December. This is the largest single-month growth rate since 2014. Phoenix (14.4%) and Seattle (13.6%) led the way, while Chicago (7.7%) recorded the slowest price gain. In addition to the move to the suburbs, lack of inventory has also helped drive prices up. According to the Associated Press, the average rate on a 30-year, fixed-rate mortgage sits at 2.81%.
Home Depot Caps Off Record Year:
A surge in the housing market is almost certainly accompanied by a surge in home improvement. During the pandemic, Home Depot's sales surged over $32 billion in the fourth quarter, up from $25.78 billion in the same period last year. To put it in context, Neil Saunders, the managing director of GlobalData, calculated that in 2020 the equivalent of every person in the United States spent $402 at Home Depot. The company boosted its quarterly dividend by 10% to $1.65/share.
America's Greatest Possible Stimulus
Brian Wesbury is one of our favorite economists to follow due to his rational, common-sense approach to the world's economy. On Thursday, he released an article outlining the idea that while more financial stimulus is on its way from Washington, the greatest stimulus is already underway. We would encourage you to click here to read the article as Brian dives into the Coronavirus vaccine and what it means for America's economic recovery.
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