Consumer Spending Rises, And Home Sales Are Up |
Posted: June 28, 2013 |
Americans spent more in May as their income rose, encouraging signs after a slow start to the year. The Commerce Department said on Thursday that consumer spending rose 0.3 percent last month, nearly erasing a decline of similar size in April. Income rose 0.5 percent. Consumers, benefiting from low inflation, spent more at retail businesses in May, notably for cars, home improvements and sporting goods. The number of people who signed contracts to buy homes in the United States jumped in May to the highest level in more than six years, a sign home sales will probably rise in the months ahead. The National Association of Realtors said on Thursday that its seasonally adjusted index for pending home sales rose 6.7 percent, to 112.3, last month, the highest level since December 2006. Signed contracts have risen 12.1 percent in the last 12 months. The increase could reflect an effort by potential buyers to complete deals before mortgage rates rise further. Mortgage rates rose in May and then jumped after the Federal Reserve chairman, Ben S. Bernanke, suggested last week that the Fed could slow its bond purchases later this year. The increase points to healthy gains in home sales in the coming months. There is generally a one- to two-month lag between a signed contract and a completed sale. The average rate on a 30-year mortgage soared this week to 4.46 percent, the highest in nearly two years.
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