This morning the National Association of Realtors reported that sales of previously-owned homes increased by 0.7% during the month of September. This translates into a seasonally adjusted annual rate of 4.15 million housing units, the highest level since January of last year and the fifth straight monthly increase. The September number compares with a figure of 3.87 million a year ago. All regions of the country reported year-over-year gains. Analysts attributed the increasing activity to declining mortgage interest rates.

What's the economic impact of this news? Well, there's no doubt that it has a favorable impact on the incomes of real estate agents. Moreover, each sale, most likely, was preceded by purchases of materials and services related to preparing the unit for sale. Likewise, each home purchase was probably followed by new purchases of home furnishings and, in some cases, by further fix-up expenditures.

On a psychological level, the recent increasing trend of turnover suggests an increasing level of confidence---a willingness to take a chance and make a change---that may be indicative of an improving economic environment.

Byline: Lafferty (MF Merlin)