Yesterday’s Cyber Monday sales were up 8.7% from 2013. The average transaction price remained flat at $133.07, meaning that the increase is due to more people doing their shopping online. The increase in home sales, on the other hand is the number of units sold. While values are up roughly 5% from this time last year (depending on who you talk to), CoreLogic says home prices are still down 12.4% from the April 2006 peak.
Low interest rates should help unit numbers AND sales prices continue to increase. The question is where rates are heading? No one knows for sure, but the persistent undershooting of the Fed’s 2% inflation goal is becoming in increasing concern. Our measures of inflation, (PPI and CPI) have been meager, and inflation expectations are starting to slip. A little bit of inflation is a good thing, and the Fed wants to see some before it increases short-term rates.