Sales of new houses in August rose to 1.001 million at a seasonally adjusted and annualized pace, the Commerce Department said on Thursday – the first time the number has broken 1 million in 14 years.
The number shows that while other sectors of the economy are soft, housing is ready to play its traditional countercyclical role of leading the way out of a recession, said Robert Dietz, chief economist of the National Association of Home Builders.
It didn’t happen last time, when the proliferation of risky subprime mortgages that were packaged into bonds ended up tanking the economy, causing home prices to fall. But it did happen in every other recession since World War II.
“Housing is the bright spot in the economy right now,” Dietz said in an interview. “It’s a total flip of where we were during the Great Recession when the economic crisis was focused on housing.”