The Economy Keeps Growing

Well that was certainly some recession.

The U.S. economy grew at a 2.4 percent annual rate in the second quarter, the Commerce Department said on Thursday. This was far stronger than even the most optimistic forecasts. The median view of economists surveyed by Econoday was for 1.5 percent growth, with a range of 0.3 percent to 2.2 percent.

We have been warning for several months that the economy has been growing faster than expected and was not actually in danger of falling into a recession this year. The second quarter GDP figures confirm this.

Home Is Where the Heart Is

Have we mentioned that the housing market is not collapsing? Here’s what the National Association of Realtors (NAR) had to say about that (emphasis added):

Pending home sales registered a modest increase of 0.3% in June from the previous month – the first increase since February – according to the National Association of REALTORS®. The South and West posted monthly losses, while sales in the Northeast and Midwest grew. All four U.S. regions saw year-over-year declines in transactions.

“The recovery has not taken place, but the housing recession is over,” said NAR Chief Economist Lawrence Yun, “The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers.”

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – rose 0.3% to 76.8 in May. Year over year, pending transactions fell by 15.6%. An index of 100 is equal to the level of contract activity in 2001.

NAR also noted the regional breakdown:

The Northeast PHSI ascended 0.6% from last month to 67.1, a decrease of 16.7% from June 2022. The Midwest index jumped 4.3% to 77.6 in June, down 17.1% from one year ago.

The South PHSI receded 1.4% to 93.3 in June, lessening 14.3% from the prior year. The West index fell 1.0% in June to 57.7, dipping 15.5% from May 2022.

This isn’t great news from a realtor’s perspective, but it certainly indicates that we are no longer in a housing market recession.