From Nick Timiraos at the WSJ: Fewer Foreclosures Could Mean Fewer Homes for Sale
In a report Friday, her firm Zelman & Associates said it now expected a 5% drop in sales of previously owned homes for 2014 to a seasonally adjusted annual level of 4.8 million units. At the start of the year, the firm had forecast nearly a 6% gain from last year, to 5.4 million from last year’s 5.1 million units.
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Ms. Zelman isn’t changing her forecasts for new home sales, which are forecast to hit 505,000 units this year, up 17% from last year. … recent data, including a proprietary survey her firm also released Friday, point to a pick-up in new-home orders since last fall …
This is a reminder that a decline in existing home sales isn’t “bad news” for the overall economy, and what matters most for jobs and the economy are new home sales. This updated Zelman forecast fits with my view of a decline in existing home sales this year, but a solid increase in new home sales.