Eventual passage of the $300 billion Dodd-Frank foreclosure bailout bill is as about as close to a cinch as you can find in Washington. Either Congress will come up with a compromise that the White House can live with, my sources tell me, or it will pass the bill over a Bush veto. All this by the end of summer, folks. The continued onslaught of negative housing news is only adding to the momentum. But as the econ team at First Trust Advisors points out, there is a silver lining in today's report on new-home sales:
Although there is more pain ahead in the housing sector, today's report on new-home sales shows the healing process is well underway. Although the pace of sales declined, the drop was in-line with expectations and above the March pace for the second month in a row. In other words, a bottom may be forming for sales. Meanwhile, total inventories are down 16.9% in the past year. More importantly, the number of unsold completed new homes—a key factor behind future construction and price changes—peaked in January at 199,000 and is now down to 182,000. The 17,000 decline in only four months is the fastest reduction in the past 20 years.