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Despite a fiscal cliff that may be only days away, the sale of new homes has increased to the highest amount in more than 2 and 1/2 years.
For November, the annual sales pace of new homes was up 4.4 percent to an estimated 377,000 homes. This was up from the rate of 361,000 in October and is predicted to reach 380,000 for the rest of the year. The improving housing market seems to be helping out the economy, but the fiscal cliff may still change the shape of things.
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With jobless claims and applications for jobless benefits on the decline and house and auto sales on the rise, the fiscal cliff could come in and ruin a lot of these beneficial trends in the economy. Though consumer confidence is still higher than four years ago, it dropped more than 6 percent from last month as consumers worried about the fiscal cliff and what it could mean for them in 2013.
Currently, home builders such as Toll Brothers Inc. (NYSE:TOL) are enjoying the increased business in home sales, but costs for construction and undeveloped land have risen, and investments in new developments could prove dangerous if the fiscal cliff halts the increasing demand for new homes. As the housing market stands, it could really benefit from a solution to the fiscal cliff that is only 5 days away.
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