The strong numbers reported Monday by the housing industry were greeted with enthusiasm by the stock market in the opening hours of trading.
Sales of existing homes in October recorded the highest level in several years with a 10.1% increase for the month.
Certainly, the $8,000 tax credit for first time homebuyers played a strong role in pushing the numbers up.
The credit was due to expire at the end of November, but has been extended to April of 2010 and expanded.
This mini-bubble, if you will, in sales is not likely to be repeated until the new deadline for the tax credit looms next year.
However, it was good news, even if distorted by the tax credit deadline.
Does this answer the concern that banks aren't lending enough?
Are stimulus dollars finally making their way out of bank vaults and into mortgages?
We'll have to wait for further analysis of the data to get those answers.
With the public, government and press focused on the short-term, any confidence boosting is welcome in the economy.
However, the long-term health of the economy and ultimately the stock market is tied to reducing the number of unemployed.
We cannot legitimately claim the economy is on the mend until it is strong enough to begin creating jobs.
Until then, gains in the stock market aren't likely to stem the tide of foreclosures or further worsening of the jobless situation.
By this measure, we still have a long, hard road in front of us.
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Good Housing News, But Long Road to Sound Economy Still Ahead originally appeared on About.com Stocks on Monday, November 23rd, 2009 at 11:11:07.
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