Dec 26, 2012
The value of existing homes in the US climbed, while sales of new properties rose to its highest level in over two years in November, a clear sign that the property market is rebounding, reported Bloomberg.
According to the median forecast of 60 economists, sales of new homes last month rose to 380,000, the highest since April 2010. Moreover, prices in 20 cities climbed by four percent during the 12 months to October 2012, the biggest annual increase since June 2010.
Mark Vitner, Senior Economist at Wells Fargo Securities LLC, said: “We’re going to see large gains in virtually all of the housing measures next year.”
“Job growth and the steady decline in the unemployment rate means that more and more workers feel confident about their own economic prospects and they’re willing to move forward with major commitments like buying a home.”
Those benefitting from greater demand for new houses include homebuilders like Los Angeles-based KB Home (KBH).
“While it has been a few years in the making, housing is becoming a bright spot for the economy and the industry is once again positioned to play its historical role of being a job creator and leading the national economy into a full recovery,” said Jeffrey Mezger, CEO and President of KBH.
He added that buying a home is cheaper than renting in most markets. Furthermore, “household formation is once again growing as millennials are now starting to leave their parents’ homes and move out on their own as the economy improves”.
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