The existing home sales report boosted stocks – however briefly – this morning. The October numbers beat analyst expectations by a small margin. They were up a half percent rather than dropping 1%. It was the first positive report since last February.
Does this mean the housing slump is over? Margaret Kelly thinks so. She’s the CEO of Re-Max International. She says that existing home sales are a better measure of the sector because they make up 85% of all purchases. If existing sales are leveling off, then the sector could be, too. Neither is she worrying about a drop in home prices year-over-year. October 2005 was unusually high--she says. A correction was inevitable.
Nouriel Roubini – a professor at New York University’s Stern School of Business – says the housing glut we’ve seen is comparable to the tech boom of the late ‘90s. “One month [of good numbers] is not a trend,” he says. Last month housing stocks were down 14%. Building permits were down 6%. Canceled orders were up. Roubini thinks we could be in store for a major slump.