April 29 - Pending home sales show demand for housing remains higher from the same time last year despite signs the rest of the economy is in the midst of another spring slowdown. Conway G. Gittens reports.
The housing sector remains immune from the slowdown that seems to be going on in just about every other part of the U.S. economy. Signed contracts for future home purchases rose in March and are up 7.0 compared to the same time last year, according to the National Association of Realtors. Sam Coffin of UBS: SOUNDBITE: SAM COFFIN, U.S. ECONOMIST, UBS (ENGLISH) SAYING: "Housing sales numbers are continuing to trend up. In fact, if anything realtors are saying they are looking at shortages of inventories of homes for sale and at the same teem household formation is picking up and that should continue to boost sales, boost rents and on and on." That optimism has helped push homebuilding stocks to solid gains. The S&P Homebuilder index is up nearly 40 percent over the past 12 months and up almost 15 percent year-to-date. Bonds are another way to play the housing recovery. Brad Friedlander of Angel Oak Multi-Strategy Income Fund has gone that route, with his fund returning 23 percent last year. He points to a number of factors working in the recovery's favor, including the easing of the foreclosure crisis. SOUNDBITE: BRAD FRIEDLANDER, MANAGER, ANGEL OAK MULTI-STRATEGY INCOME FUND (ENGLISH) SAYING: "That looming shadow inventory that everyone was so concerned about, which was obviously a concern but is now also come down by some 30-40 percent from where it was. So you are seeing a drawdown in inventories, delinquencies are down considerably, borrowers and personal consumer balance sheets are a lot better than they were a few years ago. So we are seeing, beginning to see a rebound and it is an area, which we think makes a lot of sense." And the momentum continues as the spring buying season begins. Pending home sales, which typically forecast existing home sales by one to two months, have remained above year-ago levels for nearly two-years, a welcomed sign for economy heading for a spring slowdown for the third year in a row.