Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ is clearly very bullish on the U.S. economy.
But he didn’t stop there.
He went on to write that home prices can only go up from here (emphasis ours):
“Sales activity is just a hair away from being back in the all-is-well zone of 5.0-5.5 million. What about prices? Home prices are an important determinant of consumer confidence and their spending helps makes the economy go. Things looking good here. Single-family home prices shot up 6.2% to $US213.6 thousand in May and are up 4.9% from May a year-ago, 2013. Our advice to you is to buy a house if you can find one at 213 thousand dollars. The economy is better than you think, and home prices have nowhere to go but up. Bet on it.”
Other economists were positive but more cautious in interpreting the latest data.
Paul Diggle at Capital Economics wrote that this was the largest monthly gain in 21 months, but they were still 9% lower than levels seen last July when higher mortgage rates started weighing on housing.
“We are inclined to see this jump largely as a reversal of the winter hit,” wrote Jana McTigue at Pantheon Macroeconomics following the data release. “The very low and flat trend in mortgage applications does not support the idea that demand is recovering.”
Rupkey has of course demonstrated just how buoyant he is on the U.S. economy in the past. Earlier this month, he dismissed talk of slack in the economy and wrote that we’re seeing a “full-on economic expansion” in the U.S.
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