Politics aside, consumers are spending

Largely confident about the course of the economy and their place in it, people are buying homes — new and used — in significant numbers. In recent years they also have been buying more boats, and the growing ranks of homeowners bode well for the continued moderate growth of boat sales.

New homeowners also purchase plenty of other things, including refrigerators, washing machines and other major appliances, and a meaningful uptick in household spending could help the economy build on upwardly revised gross domestic product growth of 2.1 percent in last year’s fourth quarter.

“New-home sales are the secret sauce that helps make the economy grow,” Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters after the Commerce Department said new-home sales rose 6.1 percent in February, to a seasonally adjusted annual rate of 592,000 units.

“This will put some backbone in investment spending and make this economic expansion more sustainable,” Rupkey added. New-home sales were at a seven-month high, and they showed that a recent increase in borrowing costs had not significantly weakened the market. Job growth and pay gains were helping home buyers shrug off higher mortgage rates. As Bloomberg reported, the new-home market was building on the momentum of 2016, which marked the strongest performance in nine years. Noting that new-home sales are tallied when contracts are signed, Bloomberg said they represent more timely information than reports on sales of existing homes..." Read More