Thanks in large part to the expiring tax credits, the spring selling season received a much needed shot in the arm last month.
According to the National Association of Realtors today, sales of existing homes rose 6.8 percent in March from the previous month. What’s more compared to a year ago, existing home sales were up by 16.1 percent.
“Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running,” cheered NAR chief economist Lawrence Yun. “The homebuyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices.”
But that wasn’t the only good news for housing this week. Just yesterday, John Paulson, the hedge fund manager who made billions shorting the bubble, went bullish on the sector predicting a stronger economy will keep housing afloat.
From MarketWatch by Alistair Barr entitled: Paulson & Co. turns bullish on housing, economy
“John Paulson, the hedge-fund manager famous for betting against mortgage securities, is now bullish on the U.S. housing market and the economy.
During a conference call with investors Wednesday, Paulson said he was concerned earlier this year about a potential double-dip recession.
“I’m not concerned about that at all today,” he said. It’s more likely there could be a V-shaped recovery, Paulson elaborated.
House prices have stabilized and could climb 8% to 10% nationwide in 2011, he added.
Corporate earnings are coming in ahead of expectations, the stock market is stronger and there’s a “vibrant” credit market. With the “final leg” of a rising housing market, “the outlook for 2011 could be very strong,” Paulson said.
Paulson oversaw $32 billion in assets at the start of 2010, making it the third-largest hedge-fund firm in the world behind J.P. Morgan Chase & Co
Paulson added he was concerned about a potential double-dip recession and a possible default by a Southern European nation. “I’m currently much less concerned that either those two issues will happen.”
Greece‘s problems are much better understood now and are being dealt with, he commented.
Paulson & Co. covered, or closed, many of its short positions recently and that showed up in stronger returns in April, the fund manager noted. The firm has been “much more aggressive” in positioning its Advantage funds to “participate in a stronger economic recovery,” Paulson said.”
The real test comes when rates finally move higher…..
The Case-Shiller Index Meets the “Gated Ghetto”
Existing Homes Sales Point to a Double Dip
The 2010 Housing Market “Shadow Inventory”
Underwater Homes Trap Borrowers into Higher Rates
Zandi on Housing: “I think we are going see to another leg down”
FHA Defaults: Many More on the Horizon
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