The weaker tone of the economic and labour market data has yet to be reflected in the housing numbers. Home sales rose by 3.4% m/m in April and are 10% higher than a year ago. The fact that improving housing market activity has been driven by cash-buyers and investors has given some commentators cause for concern, but we suspect that the extent to which housing is undervalued means that investment demand has considerably further to run. Meanwhile, the latest house price data revealed further small price gains, with the Case-Shiller national measure rising by a seasonally-adjusted 1.1% q/q in Q1, and the more timely CoreLogic measure rising by 0.9% m/m in April.
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