Posted on 04/29/2013 7:38:32 AM PDT by whitedog57
Pending home sales rose more than expected while real personal income continues to struggle. And the personal savings rate remains low. Looks like a zero interest rate, leveraged recovery to me!
April 29 (Bloomberg) — More Americans than forecast signed contracts in March to buy previously owned homes, another indication of progress in the housing market. The index of pending home sales increased 1.5 percent after a revised 1 percent decline the prior month.
Excluding the April 2010 first time homeowner tax credit, this is the highest print since 2007.
In related news, consumer spending in the U.S. rose more than projected in March, reflecting a jump in outlays for services that is unlikely to be repeated, signaling the biggest part of the economy will soften this quarter.
Household purchases, which account for about 70 percent of the economy, climbed 0.2 percent after a 0.7 percent gain the prior month. Incomes increased less than forecast and inflation cooled to the lowest level in more than three years. Real household income continues to struggle.
The personal savings rate (as a percentage of disposable income) remained flat … and low. This bodes ill for future housing demand related to mortgages other than FHA low down payment.
And in Europe, household savings is falling as well.
Zero interest rate policies at Central Banks are inducing low savings rates.
LLS
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