For the first time since 2005 US annual economic growth is to get a boost from existing home sales that have climbed to a three-year high as of November.
The National Association of Realtors in Washington reported today that existing home sales showed a 5.9% rise to 5.04 million annual rate, its highest in three years. A median forecast of 82 economists surveyed by Bloomberg projected a 4.9 million rate.
The economic ripple effect might be taking hold in demand for décor. Sales for furniture by Pier 1 stores have been showing consistent gains throughout the year, according to President and Chief Executive Officer Alexander Smith. The company also reported its 13th consecutive quarter of sales and profit growth on December 13.
“Housing is going from being a powerful headwind to the economy to what will be a powerful tailwind,” said Mark Zandi, chief economist at Moody’s Analytics Inc told Bloomberg. “It turned around in 2012, and I think it’s going to take off in 2013.”
According to Bloomberg’s Consumer Confidence Index a lift is also reflected by an eight-month high in consumer confidence bolstered by the rise in real-estate values.
Meanwhile retail states in the UK have become unexpectedly stagnant as consumer spending took its biggest dive in nearly two years. The Office for National Statistics in London said other sales, such as fuel, have remained unchanged since their last fall of 0.7% in October.
In Asia for the third time in four months the Bank of Japan expanded its asset-purchase program and is considering moves to check inflation at the urging of incoming Prime Minister Shinzo Abe to take action aimed at ending declining prices.
For the US Economy the previous growth estimates of 2.7% annual rate in the third quarter by the Commerce Department were beat with a 3.1% annual rate. This first gain in state and local spending government spending reflected by the report shows an increase in consumer spending and smaller trade gap.