Housing Market Shows Unexpected Growth

One of the metrics that is used to measure the health of the U.S. economy is home sales. For example, one of the fallouts of the 2008 financial crisis was that home sales dropped significantly. This lead to a drop in housing prices, which exacerbated the problems that already existed within the housing market thanks to subprime loans and other fundamental flaws within the industry. When the housing sales market is flourishing, the economy is almost always strong. When it is weak, it is typically because of a recession, or recession-like actions within the economy as a whole. For this reason, many economists look to the housing market to get a feel for what the overall health of the nation’s financial situation is.

A recent report shows that housing sales in the U.S. are on the rise. The housing report for March shows that existing house sales actually went up, despite expert analysis that said it was likely to go down because of a weak first quarter when it came to growth. Sales went up by 5.1 percent during this time, to a projected annual rate of 5.33 million units. So far, experts have been saying that a 5.30 million unit number was expected for 2016. Sales are already up 1.5 percent from what they were a year ago. If this trend keeps up, then it is likely that the economy is doing far better than what many people really believe.

For those that have a bullish stance on the economy as a whole, this is a good sign. It shows that things are growing at a faster rate than what’s been expected. If you are going to be taking out longer term binary options on general indices that represent the U.S. economy, then call options seem to be the appropriate choice right now. As long as this trend continues, then the excitement of this unexpected growth is likely to cause even more growth as a consequence. If you are still cautious, then it is smart to wait for another sign before making your move, but this is a good sign for the bulls among us.

It is important to remember that long term growth doesn’t have the largest influence on short term price fluctuation, especially if you are trading smaller parts of the U.S. economy, such as individual stocks. And because this news hasn’t had a huge influence on the indices that measure real estate yet, it could be possible that the positive impact that this news has on the overall economy could be minimal. Still, it is a good piece of news, and that is likely to influence overall trends. If you are trading based on this information, remember that it’s almost always smarter to trade with trends, rather than against them. This new develop in the housing market does have the potential to keep the growth that the U.S. economy has been seeing moving forward, and even if the impact is not immediate, it helps all areas of the market with sustained profitability.

Do beware that this could be fuel that the Federal Reserve uses when they are considering raising interest rates later in the year. A better than expected economy is exactly what they are looking for before they make this decision, and a growing housing market is a definite sign of this happening. This doesn’t seem to be on the table publicly yet, but it is one of the things that will be looked at. When the time comes for another discussion about rate changes, then this may become an issue, but in the weeks leading up to that, the news can only be perceived as positive.