Stronger home prices seen as big boost for auto sales
That 15 percent jump in light-vehicle sales in November was pretty good news. But the real harbinger of happy days in the auto world may be the latest data on home prices.
According to the Standard & Poor's/Case-Shiller Home Price Indices, prices were up 3.6 percent in the third quarter compared with the same period of last year. September prices also were higher than August; it was the sixth consecutive month of improvement.
Says Paul Taylor, chief economist for the National Automobile Dealers Association: "The degree of improvement in housing helps explain the growth in new-car sales."
The collapse of home prices helped crash the economy, including car sales, and economists have waited eagerly for a turnabout.
"That moment has now occurred," Taylor says. "Depending how you look at it, it was either in the second-quarter or the third-quarter data, but the third-quarter data confirms it."
Taylor says it's especially encouraging that some of the biggest improvements in home prices were in states that were hit hardest in the recession, such as California, Florida and Arizona.