U.S. housing market pushes ahead, trade flows improve

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Contracts to buy U.S. previously owned homes rose to a nearly 14-1/2-year high in June, the latest indication that the housing market was weathering the COVID-19 pandemic far better than the broader economy.

FILE PHOTO: A new apartment building housing construction site is seen in Los Angeles, California, U.S. July 30, 2018. REUTERS/Lucy Nicholson

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, rose 16.6% to 116.1 in June. That was the highest level since January 2006. Reports this month showed a surge in homebuilder confidence in July, and an acceleration in home construction and sales of both new and previously owned homes in June.

New cases of the respiratory illness are surging across the country. Analysts say disrupts to economic activity as authorities try to slow the spread of the virus could unleash a wave of white-collar job losses. There is also a persistent shortage of homes available for sale. Pending home sales increased 11.9% in the populous South in June. They soared 11.7% in the West and surged 54.4% in the Northeast. Contracts rose 12.2% in the Midwest.In a separate report on Wednesday, the Commerce Department said the goods trade deficit dropped 6.1% to $70.6 billion last month. Exports of goods accelerated 13.9% to $102.6 billion, eclipsing a 4.8% increase in goods imports to $173.2 billion. Goods imports fell in May to their lowest level since July 2010.

Though the smaller goods trade deficit is a boost in the calculation of gross domestic product, it was offset by continued decreases in retail and wholesale inventories. Prior declines in imports forced businesses to draw down inventories.

 

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