December began with the stock market’s best performance in almost three years.
The unemployment rate fell to a 2 ½ year low, while the number of Americans who signed contracts to buy homes surged to the highest level in a year. Homebuilders are now as confident as they were in May 2010. What’s more, consumer confidence rose by the most since April 2003, on the heels of record breaking retail sales from Black Friday and Cyber Monday. And it wasn’t all flat screens and iPads either — as Home Depot shares are now at a 52 week high.
U.S. factory activity expanded to its highest level since June, while construction spending climbed to an annual rate of some $800 billion… led by housing and commercial starts.
The Census Department released its monthly New Residential Homes Report showing a +1.3% monthly increase and +8.87% increase year-over-year. The inventory of new homes has now fallen to the lowest level seen in the last 47 years.
The U.S. is on target to invest more than $337 billion on our homes, with annualized private residential fixed investment rising 3% for the quarter, based on the Bureau Economic Analysis. Significantly, this is only the second increase since 2006… and this time it’s not boosted by artificial government tax-credit stimulus.
While shadow foreclosure inventory and the European economic community both appear to be held in check (at least for now) by coordinated institutional effort, I remain quite optimistic for the new year. How about you?